Unemployment Benefits Stalled In Senate Because The Electorate Wants Economic Growth Too

Jan 15 2014, 8:22am CST | by

Unemployment Benefits Stalled In Senate Because The Electorate Wants Economic Growth Too

The failure of the Senate to reach an agreement on either a short (3 month) or longer- term (11 month) extension of  unemployment insurance combined with two new polls showing the electorate is moving away from ‘economic fairness’ arguments is the clearest evidence of a pivot toward a preference for ‘growth’ policies.

The reason the issue has stalled is deeper than Republican intransigence over how the extension would be paid for.  This has never been a debate about fiscal responsibility and pay-go rules.  The inability of the two bills to reach the current filibuster threshold and Senator Harry Reid’s unwillingness to allow the possibility of a diverse array of amendments suggests that while a consensus among lawmakers has yet to emerge, the electorate – calling into Congressional offices back home – clearly wants something more productive in return for the extension.

Lawmakers sense this but are confused by all of the inputs and the emotional intensity tied to each preference.  Washington is just too noisy right now.  After returning from their recess, it is very likely that legislative deal-making will better reflect what the electorate is communicating.

My read is that the electorate now wants economic growth policies paired with any major piece of income redistribution legislation.  That is what the latest Rasmussen poll on the economic fairness vs. economic growth question suggests to me. Finding that 53% of Americans rate economic growth over economic fairness, Rasmussen concluded yesterday, “President Obama has declared income equality to be his number one issue this year, but most voters continue to rate economic growth as more important than economic fairness.”

And citing the always elusive (and often biased) ‘internal poll,’ Rep. John Boehner, with glee, pointed out that Republican pollster David Winston has determined that more Americans now blame President Obama for the state of the economy than do President George W. Bush, who was in power at the beginning of the Great Recession.

The Hill reports, “The Speaker shows slides illustrating the numbers. After Obama’s 2012 reelection, according to Winston’s polling, 53 percent of voters said ‘policies of the past’ were causing the nation’s economic problems, while 44 percent blamed policies ‘of the present.’ Polling in November 2013 found those numbers largely reversed; 41 percent blame the policies of the past, while 49 percent blame current policies. ‘Since he can’t blame George W. Bush anymore, the president has chosen to talk about rising income inequality, unemployment, and the need to extend emergency unemployment benefits,’ Boehner said. ‘After five years in office, Barack Obama still doesn’t have an answer to the question: Where are the jobs?

The only problem with Rep. Boehner’s thesis is that if the electorate is asking President Obama ‘where are the jobs?’ they are similarly wondering of Republicans, ‘where are your growth policies?

Clearly, with Republicans polling higher than Democrats on the issue of who is better suited to handle the economy, the electorate is not looking for obstruction of redistribution policies as much as they are looking for avenues which proactively increase employment.

As I pointed out in “Because Republicans React To Obama They Are Controlled By Him,” it is Democrats who are taking the lead in more prominently advancing ideas and legislation in accordance with their economic ideology.  Republicans focus on the errant ways of these policies without offering their own.

Either economic growth is no longer a part of the party’s ideology – replaced by anti-Government Tea Party fiscal populism –  or Republicans have become demand-side Keynesians themselves or the economic growth wing of the party is too marginalized or unorganized within it.

From another direction, Brad Plumer points out the effect of all of this in The Washington Post,  “Economists on both the left and the right who have looked at this problem tend to think the government needs to do a lot more to tackle long-term unemployment. That could include work-sharing programs. Or tax incentives for companies that hire the long-term jobless, as economist Dean Baker has suggested. Or relocation assistance. Or even, as AEI’s Kevin Hassett has proposed, the government could hire people directly. But Congress isn’t doing any of these things. They’re not even talking about any of these things. The only debate is between Democrats (and some Republicans) who want to extend the emergency unemployment insurance program and conservatives who oppose it. But there’s little legislative debate over larger, more comprehensive measures.”

Congress can’t reach a deal over the extension of unemployment insurance because only one side – the Democrats –  or one economic school, Keynesian, proactively offers an agenda.

Once Republicans figure this out, not only will we have a more robust economic debate but one that brings us closer to economic growth.

- Follow Cedric on Twitter

Source: Forbes Business


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