Payroll Tax Cut/UI Details Released
Talking Points Memo snagged the details, written up by the House Ways and Means Committee, of the payroll tax cut/unemployment insurance/”doc fix” bill. So let’s go over it.
We know the topline stuff: it’s a $150 billion piece of legislation, and $52 billion will be paid for. The payroll tax cut, extended to the end of 2012, will not have an offset. But the offsets for the unemployment extension include a sell-off of wireless spectrum, and an increase in the contribution to pension benefits for new federal employees. For the doc fix, the offsets include a variety of health care-related items, including a damaging 33% cut to the Health Care Prevention Fund (called a “slush fund” in this document).
Then there’s the changes to the unemployment system. Under the bill, unemployment beneficiaries in every state will lose anywhere between 19 and 36 weeks of unemployment benefits by September of this year. It breaks down like this (previous maximum benefit in parentheses):
States with unemployment rate under 6%: 40 weeks (60 weeks)
6.0%-6.4%: 54 weeks (73)
6.5%-6.9%: 54 weeks (86)
7.0%-7.9%: 63 weeks (86)
8.0%-8.4%: 63 weeks (93)
8.5%-8.9%: 63 weeks (99)
9.0% and above: 73 weeks (99)
These are significant drops in the numbers, and more people – I don’t have a precise number, but I would put it in the hundreds of thousands, considering that the average length of unemployment right now is around 43 weeks – will see their benefits expire.
In addition, states will be allowed to mandate drug testing as a condition of receiving unemployment benefits. Similarly, the bill will extend welfare benefits for the rest of the year but ensure that ATMs at casinos, liquor stores and strip clubs will not pay out those benefits (this seems impossible to enforce, and also, what constitutes a liquor store, which could sell much more than just liquor?). Up to 10 states, under the plan, could institute demonstration re-employment projects like Georgia Works.
I guess I feel about this the same way as Digby – we’re living in some kind of era of diminished expectations if this can be seen as a victory for liberals.
Can I just say how awesome it is that progressives are now thought to be “winning” issues by cutting taxes, cutting unemployment benefits, cutting federal pensions, cutting health programs and agreeing to mandatory drug testing? If we keep this up we’ll put Republicans out of business in no time. They will be superfluous […]
If one were to have asked me three years ago if we’d be cutting unemployment benefits with 8.4% unemployed, I’d have laughed in their face. But that was before austerity became our new motto. Now, it’s a reasonable compromise for tax cuts. What a world.
Not much more to say.