Economic help extended
Jobless recovery warrants action to provide longer federal benefits
Published: November 12, 2009, 12:30 am
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Congress has taken some wise steps to protect what is, by all accounts, the beginning of a fragile, and largely jobless, economic recovery. The Senate recently voted overwhelmingly to extend unemployment benefits by 20 weeks, expand the first-time homeowner tax credit and provide tax relief for struggling businesses.
The need for that kind of action was clearly demonstrated that same day when the Federal Reserve pledged to keep a key interest rate at a record low for an “extended period.” It is sending an unambiguous signal that the economy still requires help from the government. So do those who have lost their work because of the economic recession.
The House, which had acted on unemployment benefits earlier, quickly approved the Senate-modified version last week. If signed into law, the bill will extended unemployment benefits to more than 1 million jobless people whose benefits would otherwise expire by the end of the year. Everyone will receive 14 weeks of additional benefits, while those in states with unemployment rates of 8.5 percent and above, including New York, will get another six weeks. That would mean the unemployed in the hardest-hit states could receive up to 99 weeks of benefits. The previous record, set in the 1970s, was 65 weeks.
Meanwhile, the bill also works to bolster one of the keys to economic recovery: the housing market. An $8,000 tax credit for first-time home-buyers was enacted as part of February’s stimulus package. Set to expire this month, the credit would be extended for first-time buyers and expanded to people who have lived in their current residences at least five years. Those buyers would qualify for a smaller $6,500 credit.
That’s a wise move. The collapse of the housing market, linked to sub-prime loans, led the country into this recession, the worst since the Great Depression of the 1930s. Home sales are always a pump for the economy, as buyers also look for appliances, furniture and other big-ticket items.
If anything, the real estate market is even more critical to this recovery. In addition to reviving a critical sector that took an especially severe beating, a stronger housing market will also help bolster banks, whose reckless practices led them and the economy into the ditch.
Finally, the bill also extends a break to businesses that have incurred losses in 2008 and 2009. They will be allowed to seek refunds for taxes paid on profits over the past five years. That will help keep businesses in business, and workers working.
The bill will be sent to President Obama for his signature. The quicker he signs it, the more relieved a million-plus Americans will be.
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