Congress Plays “He Said – She Said” with Unemployed – 200,000 to lose benefits Monday – Analysis

Unemployment Lines in the 1930's preview of 2010? Image: Mt. Shasta News

The statistics are grim: the unemployment rate is currently at 9.7% and the administration has put the unemployed on notice that the situation will not improve soon. The fact that those counted in the 9.7% (or 15 Million Americans by Obama administration estimates, do not include those who have fallen off the reports due to exhausting unemployment claims. These figures do not include the “underemployed” which represents between a rise of 16.8% using “seasonally adjusted” data from the government to Gallops recent poll giving a 20.3% rate. The latest political football – 200,000 newly unemployed, who will not be receiving benefits immediately – this is due to a difference of opinion by the Congress as to how the government is going to pay for any additional unemployment claims.

One the one hand, Republicans asked the Democrats how they might pay for additional unemployment befits, while the Democrats resorted to the term “emergency funds” (which do not exist on paper), the Republicans asked the Democrats to stay through the weekend to work things out, and the Democrats declined, preferring to have the weekend off. The left blames the right, and the right blames the left, while, in reality, those underemployed and the unemployed who have fallen off the roles, and are no longer eligible for any benefits, added to those on the rolls, are not paying taxes necessary to sustain the program (and any other programs).

The IRS lost $138 Billion in 2009 due to unemployment and the underemployed. The logic follows that as more individuals join the unemployment rolls, fall off the roles, and are underemployed, these losses will become more severe. The fact that the Federal Government relies on income tax collected to pay for everything, should be sending a message to both the administration and the Congress, that job creation (besides the 17,000 jobs to be created at the IRS to oversee the collection of “fees” from those who cannot afford, or refuse to carry health insurance), should be a first priority – the recent job creation bill, passed by congress, creates more bureaucracy than actual hard jobs, and those jobs, (even with incentives to small businesses), will be hard to come by, considering that small business, will be burdened with the costs of complying with the new health care legislation (taxes are only a part of the problem with that program.)

Therefore, the 200,000 that will go without benefits, being used by both parties to gain political points, are just the tip of the iceberg, (although no less important that the other 15 million American’s), and that is due to the reasonable assumption that with the largest of corporations taking a huge financial hit (reported by CNN) , including John Deer and Caterpillar, they will either lay-off, put in place a hiring freeze, or move plants to nations who are more “tax friendly”. The preceding will lead to more unemployed and less income from the IRS to give to the federal government for things like unemployment benefits.

Therefore, the bigger headlines are being lost, and 200,000 individuals are being left holding the bag – (temporarily). To raise the type of money it will take to continue to fund existing and new programs (such as the massive health insurance reform bill), the little income that will be derived from the expiring Bush Tax cuts (which will resulting an across the board federal tax increase for every working American will be hardly enough. Real tax increase must be put into place to cover the losses and those will be across the board. Unless and until the spending is reigned in and the Congress acts responsibly when passing legislation (see Pork in every bill passed to date), in order to try and cover the current federal bills. The only sane way to deal with this is a concerted effort to make life more bearable for both Big Business and Small, as well as those left working, in the form of tax cuts, to increase hiring and revenue in the private sector, where the permanent jobs are created, and the taxes are paid. It is no wonder that the President as well Congress has seen a drop in approval, the Congress specifically reaching historic proportions. The partisan “he said-she said” will no longer cut it - both parties need to work together, and if one refuses (and that appears to be the Democrats who are in the position of power to either work or not work with the Republicans, who have made the offer on numerous occasions) in order to save our nation. The fact that a third viable party is necessary at this stage, perhaps a party of constitutionalists and fiscal conservatives, (Tea Party), is being raised at coffee tables nationwide. The current crop of politicians from both major parties, need to adjust and learn to play well together. One things that the Democrats cannot have failed to notice is that, although they did win, as they keep reminding any republican who will listen, there is a great deal of buyer’s remorse.