Congress Watch: Crisis in Ukraine and Unemployment Benefits

(Joe Jansen has a decade and a half of experience working as a staff member on Capitol Hill.  He has worked in almost every legislative capacity in both the House and Senate. Joe will be a frequent contributor to TPA’s blog.) This week, both the House and Senate return from week-long recesses.  As the House works hard on naming a slew of post office buildings, most eyes will be focused on the Senate, which is expected to consider bills dealing with the situation in Ukraine and, extending the long-term unemployment insurance benefits that expired at the end of last year.

Most Senators agree on the need to act on Ukraine and are very supportive of providing much-needed loan guarantees and imposing sanctions on certain Russian and Ukrainian officials, which the bill does.  However, there is some disagreement on the inclusion of a section of the bill that makes changes to the International Monetary Fund (IMF).  And, some Senators would like to provide military assistance in the form of arms to the government of Ukraine.  However, neither of these issues should stop the bill’s progress.

After acting on the Ukraine bill and some of President Obama’s nominees, the Senate is expected to again consider legislation to extend unemployment benefits for the long-term unemployed.  The “temporary” federal program that pays unemployment benefits to individuals who have exhausted their state benefits expired at the end of 2013.  Since then, the Senate has considered bills to extend them several times.  These extension attempts failed because the costs were not offset and Senate Majority Leader Reid refused to allow the Senate to consider amendments that might actually spur economic growth and create jobs.

Prior to leaving for the recess, a group of Senators announced that they had reached an agreement to pay for a short-term extension of benefits, providing the 60 votes needed to invoke cloture and pass the bill.  Under this agreement, unemployment benefits for the long-term unemployed would be extended through May 2014.  The extension would also be retroactive to December 29, 2013, when the program last expired.  It is expected to cost around $10 billion and those costs would be offset through two provisions.  First, the Senators agreed to extend fees on certain goods coming into the United States through U.S. Customs.  Second, it would increase federal revenues through “pension smoothing” – decreasing the amount employers are required to place in their pension plans which increases their taxable income, thereby increasing federal tax receipts.

The compromise agreement appears to have the votes to make it through the Senate.  This would put pressure on the House to act on the issue.  But, last week, the National Association of State Workforce Agencies – the group that represents the people who would need to actually implement the compromise – wrote a letter that questions the plan’s workability to Congressional leaders.  The states have many serious concerns about the plan.  But, the main objection is that the “bills requirements would cause considerable delay in implementation of the program and increased administrative issues and costs.  Some states have indicated they might decide such changes are not feasible in the short time available, and therefore would consider” not participating in the program.

Although there is still time to work with the states and make changes to the bill that would make it workable, it appears that the Senate is moving full-steam ahead.  After all, the U.S. Department of Labor – part of the same administration that brought us Obamacare and all of its success – said last week that the bill was workable in its current form.

The Department of Labor’s seal of approval might be enough for Senators.  Many states and the leaders in the House of Representatives do not appear to agree.  If Senators do not head back to the drawing board, this compromise is not unlikely to resolve the issue.