Talk Radio News Service: News, Politics, Media

By Ellen Ratner

It's been a long time since Capitol Hill politics starting looking a lot like they used to: Personal animus is out and deal-making, pork and problem solving are back in fashion. That's the way it should be – our country currently faces some major problems that, for once, aren't the creation of some candidate's oppo research department.

America is looking down the long, dark tunnel of recession, or possibly worse. Rumors abound about deal-making on the Colombia Free Trade Agreement, and of even greater importance to more Americans, a second stimulus package. Bush and his fellow corporate cowboys want the Colombia Free Trade Agreement, and the Democrats are eager to take care of their own, which are the folks most likely to be hurt in the current blizzard of bad economic news. House Speaker Pelosi managed to shrewdly kill the Colombia deal, but not because she dislikes either Colombia or free trade. Rather, it gives her something to swap with the Republican corporate cowboys in exchange for advancing part of the Democratic economic agenda.

These days things move at warp speed, and economic woes are no exception. The Democrats agreed with the first stimulus package; this time, the checks really are in the mail. But in the meantime, everything made out of or from petroleum has soared even higher, and it's an open question whether we'll spend our $600 windfall on gasoline, fuel oil, credit cards or mortgage payments. One thing is certain: $600 don't buy what it used to (starting from a month ago), and they surely aren't going to ease the pain as the promised blizzard of bad news turns pink from all those slips telling Joe and Sally, "You're Fired!" In short, if things were doing any better, the economy would only be terrible.

Last Thursday, several U.S. senators gathered with union leaders to figure out a second stimulus package. This was down and dirty – up for discussion were tax rebates, an increase of food stamps and adding more time to unemployment insurance eligibility. (Welfare reform was a great idea when the economy was booming; we'll see how many reformers are left if unemployment increases to 7 or 8 percent.)

Of all the proposals served up, extending unemployment benefits would likely help more people more effectively. The Joint Economic Committee's Democratic staff members agree, and they point to history: During the last two economic troughs into which the nation tumbled (1991 and 2001), Congress approved and a Republican president agreed to extensions of employment benefits. This is almost a bipartisan response to employment crises, and the only arguments usually revolve around how long to extend and how much to increase benefits.

Consider this: By this June, an estimated 1.3 million Americans will have exhausted their unemployment benefits, and this with a recession likely to be just beginning. People will find it tougher to get a job. And economists figure that nothing stimulates the economy or stitches the social safety net tighter than in providing adequate unemployment benefits.

Naturally, Bush is stalling. He argues that it's too soon for a second stimulus package because the first one needs time to work. Just as he was too slow to react to changes in Iraq, Bush is too slow on the economy – things are simply changing faster than his ability to convincingly procrastinate or argue that we should wait and see. In short, events are overtaking reaction time. There must be help before the job market turns ugly. There must also be more targeted help – and unemployment insurance does the trick.

The more one scratches the surface here, the more dangerous things appear. While the official unemployment rate remains low, the employment rate (those who actually have jobs) is lower than during the recession of 2001. That year 32 percent of people took the full amount of unemployment insurance. But now, even before we've officially entered a recession, 36 percent of those on unemployment have already exhausted their benefits. Today, many economists consider the employment rate a better indicator of job health than the unemployment rate. Hard to believe, but unless something is done soon, and if a recession takes hold, the American public may once again be facing the prospect of bread lines and soup kitchens.

More reliable and frequent data now allow analysts to understand the concept of "employment" far better than in former downturns. For example, "work" can mean full-time employment or a mere part-time job. Many unemployed people will take part-time jobs as a way to put food on the table; they may count as "working," but part-time doesn't pay the rent, mortgage or car payment. One fifth of today's part-time workers say they took their jobs because they could not find full-time jobs. In fact, the Department of Labor admits that the unemployment rate would be a whopping 9.1 percent if it included people who were marginally or part-time employed or those who needed and wanted to be fully employed.

The public should not be fooled. When government officials bloviate about the economy's overall health, look behind the numbers. There is a far greater crisis with employment than the gross numbers suggest and that the corporate cowboys would like to admit.

In the end, even die-hard Republicans come around to support increasing the length and amount of unemployment insurance. During past recessions, extending unemployment benefit eligibility had a direct effect on the GDP: For every dollar of paid benefits, demand was stimulated by $1.64.

I say let Pelosi play her political games. If that's what it takes to extract another stimulus package from the Republicans, so be it. In this political game, for once, the winner will be the American people.