Jobless Benefits Showdown

August 03, 1991

Any doubt that the 1992 election campaign begins around Labor Day should be dispelled by Congress' overwhelming approval of a Democratic bill to extend unemployment benefits by up to 20 additional weeks. When the $5.8 billion bill lands on President Bush's desk, chances are he will sign it but refuse to declare the "dire emergency" that will bring the bill's provisions into effect.

Mr. Bush seized upon a slight dip in the jobless rate, from 7 percent to 6.8 percent, to proclaim that the economy is looking up, ignoring in the process an unexpected drop of 51,000 available jobs. The president is counting on an unambiguous recovery to guarantee his re-election. The Democrats, though hardly admitting as much, figure a "double-dip" recession or continuing doldrums will improve their chances for the White House.

In the political jockeying over the jobless benefits bill, Democrats belatedly sought to exploit an issue that is one of "theirs." More than 8 million workers are jobless and receiving benefits for the 26-week period provided by current law. Many others, including 1.6 million since last April, have run out their benefits string and are hurting.

That Mr. Bush is on the spot was shown by two late-breaking developments as Congress pushed for its August recess: First, Senate Republicans proposed a more modest $3.4 billion bill to extend job benefits for 10 weeks that was rejected in committee; second, most Republican lawmakers, including Maryland's three GOP House members, deserted the White House rather than incur the anger of their jobless constituents.

Yet in our view, there is an overriding issue here: the continuing integrity of the 1990 budget agreement to hold down government spending and deficits. The Republican alternative would have adhered, at least technically, to the provision that any spending increases have to be offset by revenue increases or cuts in other domestic programs. It called for auctioning FCC commercial radio frequencies and tougher collections of student loans. The Democrats would set a bad domestic sector precedent by using an "emergency" budget-busting loophole to pay for the added jobless benefits.

This could effectively undercut the budget agreement -- the best fiscal discipline tool in years. For that reason, Mr. Bush should hold firm despite the unkindly rhetoric that will come his way over the Labor Day holiday. If the economy does not improve in September, both parties should push for a responsible compromise. Despite political pressures, there's enough common ground already to make an agreement possible.

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