Highway Trust Fund Temporarily Saved, Unemployed Still Waiting on EUC
by Jessica Schieder, 7/18/2014
The House of Representatives has voted to approve a temporary extension of the National Highway Trust fund until May 2015 – the legislation will save hundreds of thousands of construction jobs, which would have been lost without the patch.
While the House protected hundreds of thousands of jobs in construction, advocates for the renewal of Emergency Unemployment Compensation (EUC) were distressed by how the bill was paid for. The highway extension bill uses funding from pension smoothing* and customs fees – the same sources that had been included in bipartisan legislation to extend unemployment benefits.
The funding, which could have supported more than 3 million Americans who have been searching for work for more than six months, was instead used in a last-ditch effort to prevent an additional 700,000 Americans from becoming unemployed, as a result of the National Highway Trust Fund's expiration.
Infrastructure spending – like investments in education, food security, and programs for the unemployed – has been choked in recent years due to concerns about the national debt and balancing the budget. The Center for Effective Government has played an active role in discussing the potential for various types of spending to stimulate the economy and ensure that Americans are able to find more steady employment. For example, investing in education has the potential to put more teachers to work, as well as improve children’s education. Similarly, investing in badly needed infrastructure has the benefit of employing engineers while also fixing potholes, bridges, and dams.
Crisis budgeting in recent years has discouraged longer-term investments and put off maintenance on the infrastructure that makes this nation a first-class place to do business.
Some pundits have painted a choice: members of Congress can support using this money to pay for unemployment insurance or use it to save the National Highway Trust Fund. A better question is perhaps: In a nation as mighty and wealthy as the United States, why do we pretend that we have to choose between the two? Why can't we do both? Budgeting should not be a question of "either or"; it is a creative process, where solutions to problems are addressed in order to reflect the nation's needs and priorities.
Americans are badly in need of jobs, as there are simply not enough to go around. Federal Reserve Chair Janet Yellen has emphasized this remaining “slack” in the economy and labor market repeatedly. These jobs should be created as soon as possible. At the same time, the clock is running out for the more than 3.4 million Americans who would benefit from extended unemployment insurance. The needs of the unemployed, especially the long-term unemployed, should also be addressed with an urgency reflecting the utter devastation facing these families.
* “Pension smoothing” refers to a temporary lowering of mandatory pension contributions by corporations, which results in lower pension-related tax deductions and an increase in the taxes a corporation must pay. Pension smoothing can potentially contribute to retirement insecurity in the long-run while increasing tax revenue in the short term.
For additional reading on unemployment insurance:
Six Months after Emergency Unemployment Benefits Expired, 2.8 Million Americans Left Behind, The Fine Print blog, May 21, 2014
Witness Wednesdays: Stories of the Long-Term Unemployed to Be Read on Capitol Hill, The Fine Print blog, June 10, 2014
Bipartisan Unemployment Benefits Bills in Both Houses, The Fine Print blog, July 2, 2014
Unemployment Benefits Keep Families in their Homes, The Fine Print blog, August 8, 2014
To share your story, learn how to take action, and read more about the Witness Wednesday: Voices of the Unemployed events, click the logo below:
Editor's note: This post has been updated since its original publication date.