CBO report lifts Dems argument for extending federal jobless benefits

The argument by congressional Democrats that the economy needs the reauthorization a federal unemployment benefits program got a lift on Tuesday.

The Congressional Budget Office (CBO) said that while the emergency unemployment compensation (EUC) program would cost $25.7 billion for another year it would create 200,000 jobs and add 0.2 percent to gross domestic product. 

House Budget Committee ranking member Chris Van Hollen (Md.) said the report shows that "failure to extend unemployment compensation will not only hurt struggling families, but will also cost the economy 200,000 lost jobs."

"Congress should not leave town until we extend unemployment insurance and replace the sequester," he said.

The CBO report lends support to the Democratic argument that the program provides an economic boost while the national unemployment rate is still above 7 percent.

House and Senate Democrats have ramped up their efforts — bills have been introduced in both chambers to extend the program through 2014 — to build support for continuing the program that provides jobless benefits to those who have been out of work for at least six months and have exhausted their state-level benefits. 

Without a reauthorization, 1.3 million people will immediately lose their benefits on Dec. 28. 

But, right now, there are no signs that Republicans are willing to consider another extension.

House Ways and Means Committee Democrats released a new report on Tuesday that shows that those affected include 20,000 veterans and 2 million children. 

"Millions of unemployed Americans and their children would be left out in the economic cold just days after Christmas unless Congress acts to extend this vital program,” said Rep. Sander Levin (Mich.), ranking member of the House Ways and Means Committee.

"This report just adds to the urgency that confronts this Congress over the next two weeks. Congress must act."

Time is running out for Congress to approve a bill — the House is expected to leave town for the holidays Dec. 13.

The Democrats' report also says that without the federal program, only 24 percent of unemployed Americans would have received unemployment benefits, the lowest UI recipiency rate for Americans looking for work in more than 50 years. 

CBO did say that while "output would be greater and employment higher in the next year if the EUC program and other related expiring provisions were extended, those policies would lead to greater federal debt, which would eventually reduce the nation’s output and income slightly below what would occur under current law."

The federal benefits program kicked into during the recession in 2008 and has been reauthorized several times, the last being during the fiscal cliff negotiations in January. 

While the program has been renewed several times since 2008, most recently as part of last year’s fiscal cliff deal, House Republicans are signaling they’ve had enough.