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The following editorial appeared in Tuesday's Washington Post:
Of all the grim new economic numbers to emanate from the federal government of late, none was more depressing than Friday's report that unemployment in May reached 5.5 percent, up from 5 percent in April. This was the largest one-month spike in 22 years. And even though much of it was caused by an unusual increase in the number of new, young unsuccessful job-seekers, the higher rate is also a sign that the Great American Jobs Machine is sputtering -- and a possible harbinger of recession. There are now 8.5 million Americans who want work and cannot find it, an increase of 1.6 million in the last year, according to the Labor Department.
Obviously, the long-term solution is to restore the economy's vitality, which has been badly undermined by the housing slump. The Federal Reserve has taken the lead on that front, through interest rate cuts and other measures, but the rising threat of inflation handcuffs the Fed now. Congress, too, has already passed $168 billion worth of economic stimulus; the first tax rebate checks are making their way to households around the country. Yet rising gas prices will gobble up much of this injection, and it is not clear that measures to prop up housing, which are being debated in Congress, will have much effect on the overall economy.
Extending unemployment benefits from 26 weeks to 39 weeks should have been in the original stimulus package; it is the best arrow left in Congress' quiver. Not only would it help cushion the blow of joblessness to those laid off through no fault of their own, but economic studies suggest that unemployment benefits stimulate the economy because they are quickly spent on goods and services. The Senate has passed an extension of unemployment benefits by a veto-proof majority, as part of a larger bill funding military operations in Iraq and Afghanistan. But the House's Democratic leaders are considering dropping it from a similar bill because their party's conservative "Blue Dog" faction worries about the cost: about $1 billion a month, according to the Congressional Budget Office.
It's true, as the Bush administration and other opponents say, that even at 5.5 percent, unemployment is not high by historical standards and that some workers will choose to stay out of work if they know that they'll keep getting benefits. In Europe, lush unemployment benefits have, indeed, created long-term joblessness. But the CBO suggests that such effects are still relatively weak in this country and get weaker as the unemployment rate rises; a temporary extension would hardly institutionalize sloth. Let the House separate an unemployment benefits extension from the Iraq-Afghanistan bill. One way or the other, however, the measure deserves to pass.
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