Report: UI, aid to states, improved credit access will help recovery

Extending unemployment insurance, providing federal aid to state and local governments and increasing access to credit for small businesses are needed to speed up the pace of the economic recovery. 

A new report released Friday by the Joint Economic Committee outlined the economy’s continued challenges through the first half of 2010 and possible solutions to accelerate growth. 

Despite the improving economy, concerns range about the recovery’s progress. 

“I am concerned about the economic data showing that millions of Americans continue to suffer the recession’s effects,” said JEC Chairwoman Carolyn Maloney (D-N.Y.). “As the report points out, policymakers need to resist the political siren call of short-term cuts and instead heed the economic imperative of job creation, the core component of a robust economic recovery.”

Extending unemployment benefits “would have ripple effects across the economy, helping to boost growth,” according to the report. 

The Senate is poised to pass a long-delayed six-month extension that will restore benefits for 2.5 million of the long-term unemployed on Tuesday. 

Benefits beyond 26 weeks expired June 2, leaving a growing number of unemployed without their weekly checks amid a protracted uncertainty on whether Congress would act.

Senate Majority Leader Harry Reid (D-Nev.) put the measure on hold for an additional week as the chamber waits for the replacement for Sen. Robert Byrd (D-W.Va.), who died late last month, to arrive in Washington. 

The $34 billion measure, which isn’t paid for, is expected to pass with the help of Carte Goodwin, the former chief counsel for West Virginia Gov. Joe Manchin (D), who will be sworn in Tuesday afternoon.

Friday’s report suggested helping state and local governments to avoid layoffs and service cuts while increasing credit for small businesses that could spur much-needed private-sector hiring. 

The report recommends that lawmakers avoid cutting any targeted government spending, especially that focused on job creation. Pulling back funding could slow the recovery.