As you may know, the bill that came out of the House did not include any extension of unemployment benefits. Now, the Senate committee reviewing the bill wants to add a temporary plan for an extension of benefits.
Michelle Malkin has a source who is a staffer in one of the House sub-committees who forwarded her some research concerning past “temporary” extension of benefits, that turned out to be not so temporary. Socialism at it’s best!
Unemployment benefit program 1991-1994
Original proposed program length: 8 months
Original estimated cost $7 billion
Actual length: 29 months
Actual cost: $39 billion
Number of extensions: 5
Unemployment rate at start of program: 7 percent
U rate at end: 6.4 percent
Unemployment benefit program 2002-2004
Original proposed program length: 10 months
Original estimated cost $9 billion
Actual length: 29 months
Actual cost: $26 billion
Number of extensions: 2
Unemployment rate at start of program: 5.7 percent
U rate at end: 5.8 percent
Unemployment benefit program 2008
Original proposed program length: 11 months
Original estimated cost $10 billion
Actual length: ? months
Actual cost: ? billion
Number of extensions: ?
Unemployment rate at start of program: 5 percent
U rate at end: ?
SFC [Senate Finance Committee] documents suggest the “temporary” extended unemployment benefits program would operate only through CY 2008 and cost $10 billion. But these sorts of programs never work out that way.
- RS reports that no “temporary” extended benefits program created since 1970 has expired without being extended
- Programs created in the 1980s and 1990s were extended 6 and 5 times, respectively.
- The prospects a temporary program created today will expire at the end of 2008 as the SFC proposes – with the window of eligibility shutting two days after Christmas – is both dubious and would be without precedent in the last generation.
Even if it operated only as long as the “average” program created since 1980, a “temporary” program created now will be paying extended benefits in mid 2010.
- The average duration of extended benefits programs created since 1980 is 30 months.
- If a program started in February 2008 and paid benefits for 30 months, the final payments would be made in July 2010.
- The total cost of such a program would likely be $30 billion or more.
If prior extended benefits programs began when the national unemployment rate was as low as 5.0%, these “temporary” programs would have operated for decades.
- The U.S. unemployment rate was 5.0% or higher in every month between January 1974 and April 1997 – more than 23 years in a row.
- Today’s 5.0% rate is below the average of the 1970s, 1980s, and 1990s.
- During the Clinton Administration (1993-2000), the average unemployment rate was 5.2%.
- According to a 2007 report by the Congressional Budget Office, today’s 5.0% unemployment rate is the same as the “natural rate” CBO will use “both currently and for the 10-year projection period through 2017.” Put another way, according to CBO today’s unemployment rate is “normal” not “high.”
- Creating an extended benefits program now will create a precedent to repeat this action every time the unemployment rate reaches this historically modest level. That will cost billions of dollars and encourage more and longer unemployment.