When Congress left town before the Memorial Day recess, lawmakers once again allowed jobless benefits to expire, leaving thousands of Maine’s long-term jobless families without federal aid and threatening the benefits of thousands more. Congress also failed to extend critical assistance to state Medicaid programs and COBRA subsidies to help people purchase health insurance. When it reconvenes on June 7th, the Congress must immediately extend their unemployment eligibility through November. It must also restore support for hundreds of Maine workers who will otherwise lose their health care coverage. Failure to extend enhanced federal Medicaid assistance will create a hole in the state’s budget of more than $85 million, putting vital health care services and jobs in jeopardy.
Misplaced concerns about what most contributes to long-term federal deficits and debt threaten to undermine our fragile economic recovery by jeopardizing the state budget, jobless benefits, critical health care services and thousands of health care providers’ jobs. With record long-term joblessness plaguing the nation, now is the time to maintain our investments in critical safety net programs, not cut them. These programs do not pose problems for our long-term fiscal health.
The fastest way to address the long-term deficit is to get the economy going again with the help of these emergency programs. Mark Zandi, a leading economist with Moodys.com, emphasized in recent Congressional testimony (April 14th, Senate Finance Committee) that “No form of fiscal stimulus has proved more effective during the past two years than emergency UI benefits.” If benefits are cut, “consumer spending could sink further. Attitudes would sour not only among the unemployed but also among their relatives, friends and neighbors, as they worry more about their situations.” According to the non-partisan Congressional Budget Office, every dollar of federal extended benefits circulating in the economy produces $1.93 in economic growth.
Since February 2009 when it was enacted with the support of the entire Maine congressional delegation, the Recovery Act has provided a lifeline to Maine’s families and the state’s struggling economy. Maine’s current unemployment rate is 8.1% and more than 57,000 Mainers have been jobless for an average of over 22 weeks. Without ARRA, these numbers would likely have been much worse.
The action last week by the House of Representatives to eliminate both enhanced Federal matching funds for Medicaid (FMAP) and subsidized COBRA benefits for the unemployed was an especially dangerous and misplaced precedent.
The Maine Legislature passed a bipartisan supplemental budget in April 2010 that assumes $85 million will be forthcoming in additional FMAP assistance. Without this money, Maine will be forced to make more budget cuts, which could cause the loss of public and private sector jobs. Nationally, as many as 900,000 jobs could be lost. Moreover, without COBRA benefits, many Mainers will lose their health coverage.
We are grateful to all four members of Maine’s congressional delegation for voting for these measures in the 2009 American Recovery and Reinvestment Act and supporting efforts to extend them at different times this year. We need them to continue their support for these programs and to advocate for the extension of these vital programs to ensure that we continue on the road to economic recovery.
Press Conference Statement by Christopher St. John, Executive Director of the Maine Center for Economic Policy.