New York Times economics reporter Catherine Rampell's front-page story Saturday on Arizona imposing limits on federal unemployment benefits it provides, 'For Want of a Word, Arizona's Jobless Lose Checks [1],' is the latest Times story to fiercely defend [2] unimpeded spending on unemployment benefits.
Previously this year, Times reporters had questioned 'deepest and most far-reaching' cuts in unemployment benefits by Michigan and Florida, although the supposedly drastic cuts reduced total (state plus federal) unemployment benefits to the jobless by a mere six weeks out of up to 99.
Rampell found a sympathetic case whom she sketched as being in a tragic, 'for want of a nail' situation, and seemed to think the decision a no-brainer for Arizona because, after all, the federal government was paying for it:
One word, just one little word.
That's all that Frank Ballesteros, a 62-year-old desperate for work, needs to stay afloat. The word is not 'hope' or 'God' or 'patience.' It is, improbably, 'three.'
Arizona's legislature has resisted making a small word change, from 'two' to 'three,' in its statutes. Only if it does will Mr. Ballesteros continue to receive jobless benefits through November, allowing him to pay his mortgage and medical bills.
Otherwise, his checks stop next week.
'It is almost 100 degrees out there, and I am walking door to door handing out résumés,' said Mr. Ballesteros, who worked for 21 years at a nonprofit group in Tucson before getting laid off when funding dried up. 'Now Arizona decided to kill the benefits extension from the federal government because some legislator decided we're just sitting around on our butts waiting for a check.'
That last extension of unemployment benefits - typically received in weeks 80 through 99 of unemployment - is paid for entirely with federal money and does not affect state budgets. But because of ideological opposition and other legislative priorities, Arizona and a handful of other states, like Wisconsin and Alaska, have not made the one-word change necessary to keep the program going.
Right now about 640,000 jobless Americans are receiving this last tier of benefits, according to the National Employment Law Project. The money, appropriated in the 2009 federal stimulus package, was initially intended for states with jobless rates higher than they were two years earlier. Since the recovery has been much slower than predicted, though, Congress decided last December to allow states to continue receiving the money if their unemployment rates were higher than they were three years earlier. States simply needed to change 'two' to 'three' in the relevant state law.
Rampell found 'some economists' sympathetic to state spending, but failed to identify them by ideology or economic philosophy.
Some economists say that cutting off the long-term unemployed from extended federal assistance could backfire by putting further strain on state economies instead. Indeed, most states were quick to make the one-word change, counting on the federal money not only to support ailing families but also to serve as a strong stimulus (jobless benefits are normally spent more quickly than, say, tax refunds). Nearly every state - Arizona included - had opted into the extended benefits program when it was introduced.
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When the unemployed stop receiving federal money they will cut back on spending, which means less income for local businesses. Many of them may also start relying more heavily on state services like Medicaid and homeless shelters, which are already strained for cash.