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TAXES: Tax-cut debate masks sweeping changes

Letter by John K. Retherford, Tacoma on Dec. 23, 2011 at 12:08 pm with 24 Comments »
December 23, 2011 1:21 pm

The recent standoff in Congress over how to extend the payroll tax cut and emergency unemployment insurance was nothing short of ridiculous.

Publicly, both Democrats and Republicans portray this as a debate over the length of time to extend the payroll tax cut. However, these publicized debate parameters mask a fight of much greater significance. While the public’s focus is distracted by arguments over the time frame, Democrats and Republicans are negotiating sweeping reforms to the unemployment insurance system.

These reforms would slash the period of eligibility from 99 weeks to 59 weeks, would make it easier for employers to deny benefits by terminating employees rather than laying them off, would make people without a high school diploma or GED ineligible to collect benefits and would shift the multimillion-dollar cost of pre-employment drug testing from corporate ledgers onto the public.

These reforms will prevent many thousands of Americans from collecting desperately needed benefits. This will significantly weaken consumer spending and will consequently hurt the slow but accelerating economic recovery.

Democrats have two bad choices: Let the Republicans gut unemployment insurance under the guise of reform, or let much-needed tax relief and unemployment benefits expire. Both options will do irreparable harm to the economy.

It seems that whichever option Democrats choose, Republicans will succeed at making working-class Americans suffer in the lead-up to the 2012 election.

Leave a comment Comments → 24
  1. Pacman33 says:

    “While the public’s focus is distracted by arguments over the time frame, Democrats and Republicans are negotiating sweeping reforms to the unemployment insurance system.”

    Yeah, yeah we know. Bush and Cheney were behind the WTC 9/11 conspiracy. Rumsfeld shot Lincoln and ………..

    I am struggling to find anything true in this letter. Your name is ….. John, right? I am pretty sure the “eligibility from 99 weeks to 59 weeks” isn’t legit either. I could be wrong but I think John might be reading articles from lefty blogaganda about the jobs bill posted back in May this year.

  2. Fibonacci says:

    Pacman
    I am not sure about the rest of his letter, but the drop from 99weeks to 59 weeks IS one of the things the Republikans want. Even though, I saw a study, (and no, I don’t remember the name or website), that stated that those getting unemployment lookerd harder for a job than those that weren’t getting it.

  3. Pacman denies that which he doesn’t know.

    Yes, there was reform to unemployment insurance attached. It included drug testing, which puts substantial money in the pockets of private medical testing firms, which likely support Republican campaigns. This is following suit with drug testing for welfare recipients.

    Small government? I think not.

  4. Pacman33 says:

    Why don’t you guys quit peddling your BS and provide some links?
    (not you took1 well said)

    The left is so dishonest, they will fight tooth and nail to defend lies of other leftists in addition to theirs. How shameless ….

    Got integrity?

  5. Pac
    Pot meet Kettle.

  6. concernedtacoma7 says:

    And where are these sweeping changes?

    Unemployment back to something that makes sense, and closer to a historic norm (wow, crazy! Sweeping!).

    Drug testing? The only people that are scared of drug testing are…. people using drugs.

    This letter shows that everytime an entitlement is created they never go away. Look at this unreasonable letter full of propaganda. Unfortunately for America the left buys this crap. There is a hint of Keynes to seen in this letter, the catch-all to justify all govt spending by the left. Grow up. 2 years sitting your backside living off the teet? I am sure most people here know some loser who lost a job and did nothing until his bennies ran out. Multiply that by millions.

  7. harleyrider1 says:

    Bickering – Wow.

    I never thought there would come a day when someone would say, let alone reduce it to print: Do what is best for America not what your neighbor, your union leader, or someone else tells you to. Just once.

    Country first, party second.

  8. Drug testing? The only people that are scared of drug testing are…. people using drugs.

    Or those who are afraid of unreasonable search and seizure. Civil liberties are for everyone – even the unemployed.

  9. Why would you expect anyone to look for a job when the Government continues to dole out the Taxpayers money to the unemployed?First it was for 26 weeks then another 26 weeks,that wasn’t enough so they raised it to 99 weeks.I wonder how long it will take to make the Unemployment money available until the people on unemployment can start collecting Social Security?

  10. Once upon a time unemployment was 13 weeks.

  11. concernedtacoma7 says:

    BB- no one is forcing them to take public (taxpayer!) money. They want a check, pee in a cup. They always have to option to go to family/church/NGO, or just find another job.

    5% of the US is addicted to something. Don’t you think many if those are habitually unemployed and taking entitlement money? If unemployment/welfare can be used to get people off of drugs, great.

    My only concern is who pays for it.

  12. Pacman – better to not post that to post and prove you are uninformed.

    GOP seeks to cut unemployment benefits

    http://thehill.com/blogs/on-the-money/1007-other/198327-gop-seeks-to-cut-federal-unemployment-benefits

    Tookl1 – there are none so blind as they who will not see.
    Rpot version of bipartisan support is “Our Way is the ONLY WAY”.

    Concerned – why stop with those drawing unemployment? Why not drug test EVERYBODY before they get anything from any government (from driver licenses to any money for any reason).

    Oh sorry – that would be Socialism and un-Constitutional. Actually it would be Fascism but I don’t want to overload you brain-housing-group.

    Harley – why not “do what is best for the Country and Her Citizens.

    Sincere & Amjim – once upon a time we had businesses in this country that created jobs in this country and lobbied for tariff protection from cheap foreign made merchandise.

  13. Fib – heard about that study which pointed out that those receiving UI had to provide evidence of continuing job hunting or they lost UI payments.

  14. JRetherford says:

    @Pacman33 – Actually, the source for the information in my letter was reading the bill. You might try that before commenting on what is and isn’t contained in it.

    http://thomas.loc.gov/cgi-bin/query/F?c112:2:./temp/~c112uD1sVF:e36596:

    http://thomas.loc.gov/cgi-bin/query/F?c112:2:./temp/~c112uD1sVF:e38493:

    http://thomas.loc.gov/cgi-bin/query/F?c112:2:./temp/~c112uD1sVF:e51030:

    http://thomas.loc.gov/cgi-bin/query/F?c112:2:./temp/~c112uD1sVF:e51937:

    Now, you are perfectly free to disagree with my characterization of the reforms proposed by House Republicans. I think I’m pretty clear about my opinion; I think they would be quite detrimental.

    I also realize this is a contentious issue and that many people think these reforms are needed. But that’s the point of my letter. Rather than have an open and honest debate in full view of the American public about whether these reforms should be implemented, both Republicans and Democrats are trying to pretend that these reforms aren’t even a part of the package. It seems to me that you are doing the very same thing.

  15. JRetherford says:

    @ concernedtacoma7 – My concern about drug testing is also who pays for it.

    Currently, if employers want to ensure their employees are clean and sober they bare the cost of that testing. The Republicans who propose drug testing unemployment beneficiaries say that they only want to ensure that taxpayer dollars aren’t being used by recipients to purchase illegal drugs. This certainly is A reason for implimenting such a policy. However, if state governments certify that the recipients of unemployment benefits have been tested, employers no longer need to conduct their own tests. This would save American corporations millions of dollars each year. This is why state and national chambers of comcerce have been one of the biggest lobbying forces behind this policy. It is the COC backing that convinces me that this is the more fundemental motive.

    The constitutionality of the drug testing policy is also very questionable, since when implmented by state governments (Florida if I’m not mistaken) it was struct down by the SCOTUS.

  16. concernedtacoma7 says:

    Yes, in theory companies could save a buck on testing if they hire someone off the unemployment rolls. Also, the state could save a bundle if even a small percentage stay off of drugs to collect benefits.

    Yes, Florida tried and encountered a legal roadblock, so it may be a non-issue.

    Either way it is a smaller part of your letter. 2 years of UI? Come on. It is welfare at that point. Numerous studies have shown people drag their feet on finding employment until right before their free money ends.

  17. JRetherford says:

    @ sincere – The reason people can be expected to look for a job while they’re receiving unemployment benefits is because this is a mandated part of the program.

    http://www.esd.wa.gov/uibenefits/apply/eligibility/now-what.php

    In order to collect unemployment benefits for a given week you are required to make at least 3 personal contacts with employers during that week. You also must keep detailed information about the timing and nature of those contacts in a log.

    http://www.esd.wa.gov/uibenefits/formsandpubs/job-search-log.pdf#zoom=100

    These logs are collected and audited. The ESD will actually contact a percentage of the reported employers to see if they do in fact have an application on file for you. If you are found to have erroneously or fraudulently reported work search activities you are required to pay back the benefits you had previously collected.

    As for why I think emergency unemployment benefits should be available for the 99 weeks they have been extended to, its because our suffering economy is not producing enough jobs to employ all those who are looking for work. There are currently more than 7 unemployed people per job opening in the economy.

    http://anticap.files.wordpress.com/2011/11/joltsu6911.jpg

    If all those people for whom there is no work to be had were to receive no income there would be a serious drop in consumer spending. When consumer spending new hiring falls falls GDP falls (the definition of a recession); that’s not keynesian economics, thats economics.

  18. JRetherford says:

    Concernedtacoma – I suppose you could characterize extended unemployment as essentially welfare, the programs have always been very similar. The main differences I see are that to collect unemployment you do have to be actively searching for work, and while employed workers pay into the system (why its called unemployment insurance). To me, reguardles of what you call it, it has economic benefits for society as a whole, which is what justifies asking society to pay for it.

    There are questions out there about how actively people collecting unemployment search for work. You say “Numerous studies have shown people drag their feet on finding employment until right before their free money ends.” I think these studies can be misleading and are often mischaracterized. Studies do show that people are more likely to take a job near the end of their benefits than at the beginning or middle of their benefits. However, what this reflects is that when people’s benefits are close to running out they are more likely to accept part time positions or unskilled/entry level positions. These are the so called “under-employed.”

    It is true that if they could not receive benefits for as long they might take that fast food job a lot sooner, but there are major problems with this happening on a wide scale. Of great significance in this particular recession, under-employed people are much more likely to default on existing mortgages and loans. They spend less on goods and sevices in the economy. It also make very poor use of the skills and experience within a labor force. Not to mention all the numerous social problems that arize from a larger number of people falling into poverty. I see numerous economic benefits to providing extended unemployment benefits during a jobs-recession as severe as this one. I also think its justified on the moral grounds that helping families during times of hardship is the right thing to do.

  19. from Pacman33 on DEC 24 at 4:44 AM, who wrote these lines:

    “Why don’t you guys quit peddling your BS and provide some links? (not you took1 well said) The left is so dishonest, they will fight tooth and nail to defend lies of other leftists in addition to theirs. How shameless …. Got integrity?”

    This, after his first post ridiculed the writer of the letter and challenged the accuracy and validity of the writer’s claims, and Pacman33 did all that without a single link included with either of his obviously uninformed rants of comments.

    One could ask Pacman33 to get some integrity for himself before accusing others of lacking it, which he obviously is.

    Here is a link for you Pacman3. Please take some time to read the article carefully before posting your next dishonest comment.

    http://thehill.com/blogs/on-the-money/801-economy/198441-house-republicans-propose-drug-testing-for-unemployment-benefits

    p.s. Where is the comment from took1… that Pacman33 seems to be referring to?

  20. John K. Retherford, I just wanted to commend you for writing an excellent thought-proking letter, and some absolutely terrific follow-up comments supporting your original thesis and simultaneously educating and knocking-down the fallacious arguments of your fairly uniformed critics.

    Great job!!!

    Looking forward to your next letter and/or comments.

  21. proking <<>> provoking — as in “thought-provoking”

  22. took14theteam says:

    Seriously MUCK? You had to flag that comment. You need some serious help. Be warned, the flag is on dude.

    How are your “people” doing these days. You know, the peeps you derived that “moniker” from.

  23. Pacman33 says:

    Muck –

    How do your finger tips not disappear in a spontaneously combustion after typing ‘integrity’. I am sure the meaning of the word is Greek to you.

    How lost and confused does someone need to be to think there is a link out there I could provide to support my hunch that something doesn’t exist? That is scary stuff right there. Absolutely frightening to think someone has a complete and total disconnect with reality of such magnitude.

    You need to read your link more carefully. Same as xring’s link, it’s nothing but the same blog that does not contain a reference number or anything that can verify the existence of this bill. You know, like a legitimate source would. A blog?

    John’s dead-end links are junk, they go nowhere.

    With all the legitimate things to be concerned with, I can’t understand why one would need to manufacture something.

  24. JRetherford says:

    My appologies, I didn’t realize that the links to specific sections of the bill expire after a 1/2 hr.

    You could try the PDF of the entire bill.
    http://www.gpo.gov/fdsys/pkg/BILLS-112hr3630eh/pdf/BILLS-112hr3630eh.pdf

    Or if that expires too you could try looking it up yourself. HR3630 is the bill proposed by the House. Keep in mind that this was rejected by the Senate and that the bill signed by the President was the 2 month extension without these provisions in it.

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