Extending Emergency Unemployment: Senate Finally Expected to Vote to Extend Benefits -- and Rush through Corporate Tax Cuts

by Scott Klinger, 4/2/2014

This is the tale of two pieces of legislation, one a bill to extend emergency long-term unemployment benefits for 2.3 million Americans, the other to renew 55 tax breaks, mostly for corporations.

The UI benefits and corporate tax breaks both expired at the end of last year. More than one million people found their unemployment benefits suddenly cut off in the days after Christmas after Congress could not agree on how to find $10 billion to “pay for” these benefits. In the past, when unemployment rates were as high as they are now, Congress passed federal emergency unemployment benefits without debate, treating it an earned benefit to help hard-pressed workers and communities with concentrated joblessness. But this time around, help to people jobless for more than six months got mired in partisan budget debates and the conservative obsession with cutting social programs.

Fifty-five tax breaks, known collectively as the “tax extenders,” expired on New Year’s Eve. If all are renewed, they would cost the U.S. Treasury about $50 billion this year. They include many loopholes and deductions that allow America’s most prosperous corporations to pay little or no taxes. One of these tax breaks, called the “Active Finance Exception” in Washington-speak, allows finance companies to shift some of their profits offshore in order to avoid paying U.S. taxes. It is the primary reason General Electric paid no federal income taxes on the $27 billion in profits it reported between 2008 and 2012. So important is this tax break to GE that it notes in its annual report to shareholders that failure by Congress to renew the policy would adversely impact its earnings.

Another corporate tax break, known inside the Beltway as the "CFC Look-Through Rule," allows firms to move their patents and trademarks to offshore subsidiaries and then to transfer profits earned in the U.S. to those subsidiaries in order to avoid U.S. taxes. It is the reason that Apple was able to shift $30 billion in profits to Ireland, money that was not taxed in the United States or Ireland. Apple is far from alone in using this legal loophole to slash its tax bill. Professor Ed Kleinbard calls this little accounting trick “stateless income” because it does not need to be declared on a tax return anywhere in the world.  These two tax breaks alone cost about $8 billion a year.

Tomorrow, the full Senate is expected to vote on extending emergency unemployment benefits. The bill would provide retroactive assistance for those whose benefits were so abruptly cut off after Christmas and extend new benefits until June 1, at which time help to those who are still unemployed will again be suspended. Ten Republican senators joined with the Democrats and agreed to raise some customs fees and allow corporations to delay required contributions to their employees’ pension funds (which could make workers’ pensions a bit less secure, but that’s a story for another blog post) in order to come up with the $10 billion the unemployment extension would cost. The Senate is expected to pass the emergency unemployment extension bill, but it faces a far more uncertain future in the House, where Speaker John Boehner (R-OH) has indicated his unwillingness to even allow a vote.

Elsewhere in the Senate, on Thursday, the Senate Finance Committee is widely expected to take the first step in renewing the tax extenders bill. Unlike unemployed people who will be lucky if their benefits are extended by two additional months, corporations and others will have their benefits extended to the end of 2015.

Senate Finance Committee Chairman Ron Wyden (D-OR) will put forth a bill that extends most, but not all, of the corporate tax breaks, and will not require the $50 billion cost of the corporate tax breaks to be paid for with cuts in other corporate subsidies. The Active Financing Exception (“GE Loophole”) is the second-most expensive corporate tax break Wyden favors. It would cost $10 billion, which interestingly is the same amount the Senate has had such a hard time coming up with to pay for unemployment compensation.

Wyden left the CFC Look-Through out of his proposal, but an amendment is expected to be offered to add it back in; this amendment is widely expected to pass. Wyden also continues a tax break for racehorse owners.

Those who continue to focus most of their attention on the deficit will no doubt use the increase in the deficit caused by unfunded corporate tax breaks to call for more cuts in the array of programs that help struggling families get back on their feet, possibly including unemployment benefits.

America’s corporations delivered another year of record profits last year. The stock market set new records just yesterday. Companies like General Electric, Apple, Google, and many others sailed through the recession. Unlike the millions of American families suffering because of jobs lost during the Great Recession and never regained, they don’t need public assistance to get by and pay their bills.

Congress has its priorities upside down as it rushes to grant tax breaks to corporations that don’t need them while dragging its feet to help millions of Americans who’ve been hanging on by their fingernails through a very long winter.

The following are resources to make sure politicians continue to hear your voice on emergency unemployment compensation (EUC):

  • Thank the senators who have fought so hard to extend emergency unemployment benefits by looking up their contact information here. Let them know extending the emergency unemployment compensation (EUC) program still makes a difference, and you are still watching.
  • Urge your representative to support the unemployment extension when the issue comes up in the House by entering your zip code here. You’ll be directed to a letter put together by the Half in Ten campaign.
  • Call your representative using this number, provided by the American Federation of State, County, and Municipal Employees (AFSCME): 877-363-6141.
  • Share your story via our web form here, which we will share with representatives and journalists to highlight the urgency of renewing unemployment insurance.
  • Join our Google Group to share stories and resources with others who are either unemployed or passionate about the issue.
  • Stay in touch with the Center for Effective Government by signing up for our e-mail updates and action alerts here.
  • Find links to the Center for Effective Government's recent blog posts on unemployment insurance here.



For Further Reading:

Emergency Unemployment Benefits Are Not ForgottenThe Fine Print blog, Feb. 26, 2014

Emergency Unemployment Benefits: Ways to Take ActionThe Fine Print blog, March 6, 2014

Emergency Unemployment Benefits: Time to Petition the GovernmentThe Fine Print blog, March 12, 2014

Emergency Unemployment Benefits: Compromise in the SenateThe Fine Print blog, March 14, 2014

Emergency Unemployment Benefits: Boehner Signals Reluctance in the HouseThe Fine Printblog, March 21, 2014

Emergency Unemployment Benefits Extension Clears First Hurdle in the SenateThe Fine Printblog, March 28, 2014

Extending Emergency Unemployment: Senate Finally Expected to Vote to Extend Benefits   and Rush through Corporate Tax CutsThe Fine Print blog, April 2, 2014

Emergency Unemployment Benefits Bill Passes the Senate, Increasing Pressure on the HouseThe Fine Print blog, April 8, 2014

Stories of Americans Cut Off of Emergency Unemployment CompensationGovernment Matters, April 22, 2014

Emergency Unemployment Extension Expected to Take Back Seat to Tax ExtendersThe Fine Print blog, April 25, 2014

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I have worked a lot of years never was fired always had a job never use my unemployment was laid off in February got 26 weeks of unemployment and still haven't found a job need to have my unemployment to help my family

There are people on the 'Roll Call' Blog >No Action on Unemployment Extension as Senate Leaves Town 05/22/14> that are trying to get some MEDIA to report on this - I tried to post the link but the 'monitor' wont allow it Im supposing since my post just disappeared. They are COLLECTING EUC HARDSHIP STORIES to report to the Media too. There is still a CHANCE if we FIGHT and tell our stories and email your senators and post the news on Facebook and everywhere you can think of! I saw a Fox news Sunday morning HOST reporting on the VA SCANDAL and they mentioned the EUC PLIGHT TOO-- SO KEEP UP HAMMERING THE PRESS!

Ok its all up to you (HOUSE) do the right thing (IN JESUS NAME) (WHAT WOULD JESUS DO) It could you your Family your loved one !!!!! Are life lies in your HANDS So come on pass this EXTENSION Soon in April 2014 I will do better & get better I hope to never get caught up in this situation any I just need to Work 10 more Years To full Retirement I Worked 34years @ last Job the only real Job I new (BUT GOD WILL SEE ME THROUGH) The Job did me wrong talk nasty to me on phone call But I got them .(I WILL WIN WHEN I WIN LAW SUIT CASE AGANIST THEM) IN JESUS NAME I PRAY .But for all of us over 200,000 people waiting this EXTENSION will be passed by the (HOUSE) Maybe today April 10th 2014 I hope & Pray Because they go on another Break On tomorrow April 11th 2014 till April 27th 2014 & back to business on April 28th 2014 So let hope this gets care of today Thursday April 10th 2014 & have are Money starting to show up in all our accounts by early as next week sometime Before (EASTER) Let us enjoy (CHRIST) Day (GOD HAS RISEN) & celebrate his coming BIRTH OF THE LORD JESUS .. Catch up all Bills Car Notes & so on give us our Life Back I know this will help a lot of us & I Know I will Do The Right Thing To Stay On Top Hope t never again be caught up With Man In Control Of My Life !!! THIS SOON WILL PASS (PUT GOD FIRST FOR HE IS IN CONTROL THEIRS NON GREATER THAN HE ) STAY BLESS & PRAYED UP FOR GOD IS IN CONTROL & ALL WILL PASS & WRKOUT FOR THE GOOD OF ALL OF US !!! FROM OHIO GOD BLESS LOVE YOU ALL BYE FOR NOW ON 4/10/2014 @ 9:00am (AGAIN THE EUC EXTENSION WILL PASS IN THE HOUSE TODAY APRIL 10th 2014 THE GOP WILL HAVE A HEART !!!!!!!!!!!!!!!...

Cindy (not verified) (4/9/14 12:20am)
Go to the new blog. Scroll to the top of the screen, then under the heading you will see unemployment insurance, click on it. That takes yountonthe newest blog

Where did everyone go? What happened today with the house vote???? hello!!!!! any news????

Hello EUC family!
Please convert all negative and positive energies towards DOING something to get EUC passed! We need to continue to support one another and share thoughts, ideas, and ways to take action to get the bill passed. The author Jessica Schieder has another article on here (the Center For Effective Government) called, "Emergency Unemployment Benefits Bill Passes the Senate, Increasing Pressure on the House." Please join us on the new blog. Read the article and follow the suggestions on how you can help get the EUC bill passed in the House!The

I live in Pennsylvania. I called my Senator Pat Toomey about his no vote on the EUC bill. His rude staff person said the euc bill was not paid for it was smoke and mirrors. I told her it wad paid for with pension smoothing and left over money from the farm bill. She said Mr. Tomey wanted amendments added extending uc for 1yr. This is absurd because if Boehner doesn't want to approve a five month bill why would he approved a 1yr bill. This is just a political ploy for Toomey to vote no but say he wanted to vote yes but they wouldn't add his amendments. This way he can play both sides of the fence.

I called boehner few times today, 202-225-6205

Ok I found the way to find the new blog from this page. Duh it was so easy! Just go to the top of this page under the heading, look under there and to the right. See unemployment insurance? There it is.. Simple.

Vote already. It can fail as long as it fails justly. For any one person to block a vote for millions is a travesty to the system

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