Main Street

Deal on Payroll Tax Holiday, Unemployment Insurance Coming—But at What Cost to the Jobless?

At the end of the month, two key policies that are keeping families afloat and our economy growing will expire—the payroll tax holiday and the extension of unemployment insurance. With the economy still fragile, they need to get renewed.

So what’s the status of this renewal today? A deal is being prepared—but one that, for all its importance, may end up hurting some unemployed people. In order to keep the payroll tax holiday and the unemployment insurance extension in place, Congressional Republicans have forced a major reduction in the number of weeks that the unemployed will be able to draw on their unemployment insurance. Thousands of families will lose that lifeline thanks to this arbitrary cut.

Of course, this expiration wouldn’t be happening if Congress had passed President Obama’s American Jobs Act—but it was ignored by House Republicans and blocked by filibuster, as a whole and in pieces, by Senate Republicans. That bill would have pad for these economic relief measures, and other jobs-creating programs, through a small surtax on income over $1 million. That’s a popular way to fund this economic relief and one we can afford. In the end, the best we could get through Congress at the end of last year was a short-term extension, which expires in about two weeks.

With about four job-seekers for every opening, this reduction in unemployment eligibility shouldn’t have to be the case—but Republicans, who wanted to slash weeks of unemployment even further, have control of the House and veto power in the Senate thanks to their willingness to use the filibuster.

We’re relieved that the economy won’t be taking the huge hit it could be in two weeks, but it’s incredibly frustrating to watch Congressional Republicans constantly threatening to weight down the economic recovery.