New Year, Old Budget Struggles in Washington

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Congress kicked off the second session of the 113th Congress this week with elected officials still haggling over long-term unemployment compensation while appropriators rushed to complete long-overdue spending legislation.

This morning the Senate narrowly voted to proceed with debate on a measure to extend the unemployment benefits for three months without paying for them elsewhere in the budget. Most Republicans voted against proceeding, saying the costs of an extension should be covered.

Both the struggle over long-term unemployment compensation and the hurried appropriations work are leftovers from last year, when the regular congressional budget process collapsed.

Long-term unemployment benefits are one of the most cost-effective ways for Washington to support the economic recovery. Most unemployed workers spend their benefits quickly, increasing demand for goods and service.

Extension of the benefits should be paid for. But with long-term unemployment at 2.6 percent — still quite high by historical standards – there is a continued need for extended benefits. Moreover, benefits require the recipients to continue looking for work. So cutting them off may result in many people simply dropping their job searches.

Unfortunately, Congress allowed the benefits to expire last week – creating hardship and a sense of urgency now that could have been avoided.

As for the appropriations legislation, it should all have been done well before the current fiscal year began Oct. 1. Forcing federal executives to guess at what their budgets will ultimately be ensures waste and inefficiency.

To make matters worse, the current appropriations process remains shrouded in secrecy. That’s to minimize complaints about the omnibus legislation and smooth its passage by Jan. 15, when a temporary stop-gap measure expires.

Presenting a year’s worth of hastily written spending legislation as a last-minute surprise package, however, is hardly the best way to do public business.

External links:
CBO Analysis of Bipartisan Budget Act
CBO Cost Estimate of Emergency Unemployment Compensation Extension

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