CBO: Extending Increased Unemployment Benefits Weakens Economy, Increases Unemployment in the Long-Run as Benefits Exceed Wages for Most
The Congressional Budget Office Predicted that the Increased Benefits Would Pay 5 of 6 Recipients More Than Working, Discouraging a Return to Work and Resulting in Lower Employment and Less Economic Activity in 2021
Washington – According to an analysis released today by the Congressional Budget Office (CBO), an extension of increased unemployment benefits would result in more unemployment and lower economic productivity in 2021 and would “weaken incentives to work as people compared the benefits available during unemployment to their potential earnings, and those weakened incentives would in turn tend to decrease output and employment.”
“Unemployment insurance is meant to help Americans who lose their job until they can get back on their feet and return to work,” Grassley said. “Democrats’ proposal would turn that upside down and encourage unemployment, government dependence and reduced productivity. That’s unhealthy for the economy and it’s unhealthy for the individual. As we begin to safely re-open our economy, it should be the goal of Congress to get America back to work, while helping those who can’t in a more targeted and efficient way. A strong economy and a healthy population are not competing goals; they go hand-in-hand.”
Next week, Grassley will lead a hearing on unemployment insurance. Details about that hearing can be found HERE.
Key findings from CBO analysis of Democrats’ proposal include:
· Five of every six recipients would receive benefits exceeding the amount they could expect to earn from working.
· In 2021, the nation’s economic output would be lower than it would be without the extension.
· In 2021, employment would be lower than it would be without the extension.
The analysis from CBO can be found HERE.
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