WASHINGTON -- The congressional Joint Economic Committee, headed by Maryland Sen. Paul S. Sarbanes, today urged the Federal Reserve to lower interest rates as a means of alleviating the recession.
"Lower interest rates are good insurance against a deeper recession," said Sarbanes, a Democrat. "Lower interest rates will lessen the worries of consumers, boost the construction industry and relieve some of the stress in the banking system."
"If the Fed does not act, and the economy worsens, the job and business losses will be more severe," Sarbanes said.
The report is the committee's annual examination of the economy. The committee includes Democratic and Republican members of both houses, among them Maryland Rep.
Kweisi Mfume, D-7th.
The committee also recommended more rapid provision of extended unemployment benefits to jobless workers who have exhausted their regular benefits.
"Far too many workers have already exhausted their regular benefits and federal/state extended benefits are not available in their states," said the report. "The triggers for extended benefits may need to be recalibrated so that no state would have to reach near-depression levels of unemployment before reaching the trigger."
Last month, more than 8.2 million Americans were looking for work and more than 260,000 already have exhausted their regular benefits, said the report, citing recent government statistics.
The unemployment rate in Maryland was 6.1 percent in January, with 152,000 unemployed workers. Unemployment benefits are paid up to 26 weeks. Extended benefits wouldn't be paid unless unemployment increases and the recession
lasts well into next year.
Congress is considering legislation to speed up provision of extended benefits.
Administration of the unemployment insurance program should be better funded as claims increase, the report said, so workers can receive benefits quickly. Sarbanes said
workers are "waiting six to eight weeks in order to get their checks."
The report did not directly challenge what it termed the "consensus forecast" for a "short and shallow recession." Nonetheless, Sarbanes said, "a majority of the committee is concerned about betting the farm" on this forecast.