General Motors will celebrate Thanksgiving with a lot to be thankful for. The automaker just conducted one of the largest IPOs in U.S. history while millions of taxpayers who helped to pay for GM’s bailout remain jobless, their unemployment benefits used as a bargaining chip by legislators engaged in a post-election turf war.
In a repeat of last summer’s fiasco over an unemployment compensation extension, a dispute over fiscal policy has once again deadlocked the legislative process. Democrats want to pay for the extension with deficit spending. Republicans want to use unspent stimulus money. The unemployed, meanwhile, will stay unemployed. With a jobless rate projected to exceed 8% until at least 2012, the only assurance they have is that their prospects will not improve anytime soon. 
Both parties’ positions are untenable, and both know that the extension will eventually be approved. The deadlock will only serve to punish those who, in better times, contributed their tax dollars to causes deemed more worthy, like bank and automaker bailouts. Democrats desire a stimulus piggy bank, longing for a Clintonesque stash of tax dollars that would be better off in the hands of those who earned them. The GOP would break that bank, a sound position tainted by the suggestion on their Congressional website that extending unemployment benefits will hamper job searches.  This is a bad PR move for a party working hard to reinvent itself, and there is no reason to take this position. This is not an either/or issue.
An extension makes sense as short-term stimulus, because putting money in the hands of those with limited resources increases spending and demand.  A January 2010 Congressional Budget Office report projected that unemployment benefits could even create jobs:
A temporary increase in aid to the unemployed would have a significant positive short-term effect on the economy per dollar of budgetary cost. Such an increase would slightly raise unemployment among the affected individuals, but it would also raise people’s spending and thereby increase output and employment in the economy overall. 
The same argument applies to extending the Bush tax rates:
All else being equal, lower tax payments increase demand for goods and services and thereby boost economic activity. 
When the economy improves, spending cuts must follow to control the short-term increase in the deficit from the extended benefits.
Republicans are correct to blame the failure of the stimulus to create jobs for the ongoing expense of unemployment benefits.  The jobless rate is stuck at 9.6%. If there are no jobs being created, no amount of job searching is going to return millions of Americans to the workplace. The issue is not whether we can pay for the benefits. It is why we are not creating jobs.
The TARP committed $85 billion to the auto industry.  As of June 2009, taxpayers had shelled out $55 billion for Chrysler, GM, and various elements of their financial and supply chains.  Accompanying last week’s IPO was news that GM will cost us over $45 billion in tax receipts because of a 2009 federal decision allowing the write-off of losses incurred before the bankruptcy. Should bailed out automakers fail to become profitable, taxpayers could be on the hook for billions more as the burden of terminated pension plans shifts to the PBGC. 
Lawmakers have offered nothing but excuses as to why commonsense stimulus policies like extending the Bush tax rates and approving a short-term unemployment benefits extension remain stalled, and they deserve nothing but condemnation from the jobless. It is unconscionable for legislators to deny constituents the benefits of their tax dollars while fleecing them for the cost of rescuing automakers that were destined to fail years before the recession began. Unemployed Americans may not share the distinction of being too big to fail, but with 14.8 million unable to find work, and countless more fallen by the wayside and no longer even included in the unemployment figures, legislators had better reorient their thinking. This is a national catastrophe. Why are those we charge with the responsibility to fix this problem the least inclined to do anything about it?
1..Congressional Budget Office. The Economic Outlook and Fiscal Policy Choices. September 28, 2010. p. 1.
2..GOP.gov. Legislative Digest. H.R. 6419 Emergency Unemployment Compensation Continuation Act. November 19, 2010.
3..Congressional Budget Office, op.cit, p. 17.
4..Ibid., p. 3.
5..Ibid., p. 5.
7..Congressional Budget Office. Report on the Troubled Asset Relief Program – March 2010. p. 4.
8..Congressional Budget Office. The Troubled Asset Relief Program: Report on Transactions Through June 2009. June 2009. p. 4.
9..United States Government Accountability Office. Troubled Asset Relief Program. Automaker Pension Funding and Multiple Federal Roles Pose Challenges for the Future. April 2010. Summary page.