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CBO: Extending Unemployment Benefits Would Help Economy

Budget-battle--35
AP Photo / Evan Vucci

"Recipients of the additional benefits would increase their spending on consumer goods and services," the report reads. "That increase in aggregate demand would encourage businesses to boost production and hire more workers than they otherwise would, particularly given the expected slack in the capital and labor markets."

The report also notes that the program extension would lead to increased government debt.

As the Washington Post's Greg Sargent reports, Democrats want to extend unemployment benefits in the modest budget deal being negotiated by Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA). But that's unlikely to happen because Republicans think it's too expensive, sources familiar with the negotiations say.

"Democrats have raised it," said a Democratic Senate leadership aide. But "Republicans have not indicated yet that this would be something they are open to."

As a result, Congress will likely have to deal with extending unemployment compensation separately.

Sahil Kapur contributed reporting.