CBO: Extending Unemployment Benefits Would Help Economy

|
December 3, 2013 12:46 p.m.

Extension of the unemployment benefits set to expire at the end of 2013 would boost the economy and create jobs, according to a Congressional Budget Office report released Tuesday.

CBO said that extending emergency unemployment compensation benefits for another year would boost the GDP because more people would be spending money.

“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.

Latest Livewire
Change to Commenting Permissions Starting May 1st

Beginning May 1, 2021, the option to comment on an article will be reserved only for TPM members. Non-members and those with free accounts will still be able to read comments both past and present, but will no longer be able to participate.

We hope that dedicated participants in the comments will join us as members, and want to make it as easy as possible for you to to so. We are offering 40% OFF an annual Prime membership to TPM readers with commenting accounts.

40% Off an Annual Prime Membership

We also offer FREE memberships to those experiencing financial hardship and FREE memberships for students.

View all options
Comments
Masthead Masthead
Founder & Editor-in-Chief:
Executive Editor:
Managing Editor:
Associate Editor:
Editor at Large:
General Counsel:
Publisher:
Head of Product:
Director of Technology:
Associate Publisher:
Front End Developer:
Senior Designer: