Transcript: Remarks by Gene Sperling on extending federal emergency unemployment insurance benefits – Jan. 6, 2014

Partial transcript of remarks by White House National Economic Council Director Gene Sperling on extending federal emergency unemployment benefits. The press briefing was held on Jan. 6, 2014:

There’s no question that we go into 2014 with more economic momentum. Unemployment rate is down to 7 percent. We’ve had 2.3 million private sector jobs over the last year. We’ve seen housing up about — housing prices up about 13 percent. But there’s also no question that we need to ensure the economy has more momentum and that we’re having a recovery that leaves no one behind.

In terms of job growth, there’s no question there are opportunities for us to move the ball forward as a country. The President has put forward a grand bargain on jobs, a proposal that he announced at Chattanooga, that would combine business tax reform that would lower rates, have a minimum foreign earning tax, combined with an infrastructure initiative. We’re working on bipartisan legislation on housing finance reform, on immigration, on manufacturing.

But it’s also no question that we have to make sure that this recovery does leave no one behind. And that means addressing what is clearly perhaps the worst legacy of the Great Recession, which is the crisis of long term unemployment that we still face in our country.

While we’ve seen the unemployment rate come down generally, and particularly for those who are short-term unemployed, those who are long-term unemployed continue to face a very difficult labor market and we know that those who stay out of the labor force too long often suffer serious economic and psychological wounds, and that we as a country have to be committed to doing everything we can to help those who are long-term unemployed find new jobs to support their families and get them back on their feet.

And that’s going to take an attack on all fronts on long-term unemployment. It’s going to mean, one, doing more to give the recovery more momentum, more job creation so there are more jobs — so it’s not three people looking for every one job open, but that have many more jobs created. Secondly, to work in partnership with CEOs in our country to make sure that we are all working in partnership to give those who are long-term unemployed the most opportunities possible to interview, to get a chance at a new job. And we have been working together in partnership with many of our country’s top CEOs. And the President will, in the coming weeks, have more to say on that.

But, finally, we have to give the basic support for those who are out there who have worked in the past and are out there every day working hard to find a new job. We, as a country — we’re a country that has each other’s back in hard times. We have never, over the last half-century, cut off emergency unemployment benefits when long-term unemployment was even barely over half the rate that we have right now. Now is not the time to start.

I’ll tell you what today is. Today is the day that 1.3 million Americans start going to their mailbox and find that the check that they expected to get today is not there — the check that is a temporary lifeline for families who are facing long-term unemployment; a check that puts food on their table and perhaps the gas in their car they need to drive to interview for a new job. Today is the day — today and tomorrow is the day that that mailbox will be empty, and those families will face hardship in covering for the basic necessities.

Over 2014, over the whole year, the number would be 4.9 million people who would find their emergency unemployment benefits cut off at some point. And those 4.9 million support an additional 9 million, so this would affect 14 million families over the course of 2014.

Now, while today and tomorrow are the days that the 1.3 million Americans will find their temporary lifeline not in their mailbox, today is also the day that we have a chance to do something about it. There is a bipartisan piece of legislation supported by Democratic Senator Jack Reed and Republican Senator Heller from Nevada that says that we should extend emergency unemployment for three months, right now. This will obviously give us more time to figure out what is the best way to deal with a longer solution for 2014. But we can act right now to help those 1.3 million people. In fact, in these three months, that number would grow to helping over 2 million Americans.

I talked to Senator Heller on Friday and he said for him, this was not ideology. This was being a senator in a state that had 9 percent unemployment. It was talking to constituents every day who are often in economic distress who desperately wanted a job, and understanding that we’re a country that has each other’s back in these difficult times.

I want to say just two points before taking questions that are important to recognize. Number one, you are only eligible for emergency unemployment benefits if you are actively looking for work. This can actually help encourage people to stay in the workforce and not get discouraged because they have to be actively looking for work to be eligible for these benefits.

Secondly, to use a popular word among those of you who cover the Fed — the emergency unemployment benefits are designed to taper off as unemployment goes down. So for example, when you talk about the fact that we have 46 extra emergency weeks, that is only for a state that has over 9 percent unemployment. If your unemployment goes beneath 9 percent, then there’s 10 weeks less available. When it goes under 7 percent unemployment, then there’s nine less weeks available. When it goes under 6 percent, there’s an additional 14 more weeks unavailable.

So this is not designed to go on forever. It is a temporary lifeline in difficult times that our country has relied on for well over a half-century. And the President feels very strongly that this deserves the support of both Democratic and Republican senators — a bipartisan proposal to extend for three months. And we believe this should — this deserves to pass.

Gene, as you know, Republicans want this offset at $6.5 billion for the three months. In any way, shape or form, is the administration open to negotiating an offset of $6.5 billion for the three months and then using that as a precedent to offset the much larger cost — $35 billion — over a full calendar year?

Gene Sperling:
We have just an urgent situation right now. As I said, today is the day when people have been cut off, but today is the day they find the check not there. The President believes that we should pass this right away with no strings attached.

Now, that is more in line with precedent than anything else. Fourteen of the last 17 times in 20 years that it’s been extended, there’s been no strings attached. All five times — all five times that the previous President Bush extended emergency unemployment benefits, there was no pay-for strings attached and the unemployment rate was lower each of those five times than it is today.

So I think that the compromise that is inherent in the Heller-Reed bipartisan legislation is let’s move quickly and pass this three-month extension now. This will help Americans immediately and this will give us more time to have a larger conversation about what happens after the three months are over.

To follow up, would you be willing to offset a calendar year if not the three months? Or are you opposed to offsetting under every circumstance?

Gene Sperling:
What I’ve said is let’s move quickly now because we’re in an urgent situation. We didn’t get it passed in December. If we take this step now, that will leave more time to have a broader discussion about how best to do it for the remainder of 2014 after that.

So you don’t rule it out?

Gene Sperling:
Our focus right now is on the legislation that is up there. It’s the only bipartisan plan that’s been there. There’s been talk, but there’s one bipartisan plan; it’s to extend for three months on an emergency level. That’s where our focus is. That’s what we want to encourage people to support — with the understanding there will be time to discuss what to do when that three months is over.

But just to clarify, are you opposed — is the White House opposed to negotiating those offsets? Are you — I know you want this short term, do it now. But if Republicans draw a line on this that they’re saying right now they want it offset, is that something the White House is willing to negotiate on?

Gene Sperling:
Our focus right now, Jon, is to get this passed.

And I just want to point out, as I’ve said, this is the day — I mean, people have already been cut off. People are right now, today, who maybe got as little as $150 a week, or maybe an average of $300 a week, but this was their lifeline. This was their basic support. When you have the first bipartisan proposal, when it could be passed right now with no strings attached, when that is consistent with the overwhelming precedent before, the clear right thing for us to do right now is pass this measure now in its current form. And again, it’s just for three months. It gives more time to have those types of further bipartisan discussions about what else you might do to extend it after that.

Gene, what do you say to Republicans who are not necessarily worried about the fact that some people are not getting their insurance benefits, the unemployment insurance benefits today, they are simply worried about the fact that we are out — things are getting better, we’re out of recession, and the fact that it saves money not to extend these benefits? What do you say to those Republicans?

Gene Sperling:
First of all, extending emergency unemployment benefits is the right thing to do based on our economic values. These are our neighbors. These are community members. These are our fellow parents struggling to get by. It’s also the common-sense thing to do economically. It’s been estimated that unemployment insurance extended in 2014 would mean an additional 230,000 jobs, an additional fifth of a percent of growth. People have estimated that for every dollar you put in the pocket of somebody in this kind of distressed situation, it leads to a multiplier of a $1.50 helping in the economy. So it’s smart economically. But it’s also just the right thing to do.

And I guess what I’d say is, the reason that you’ve had emergency unemployment benefits like this over 50 years over Democrat and Republican Presidents is that we understand that perhaps when unemployment is at a low level, one can assume that most people should be able to find work in some way and so you limit unemployment benefits to 26 weeks. But when you have nine states that are over 8 percent unemployment, when you have Rhode Island and Nevada at 9 percent unemployment, when you have historic levels of long-term unemployment, you know that there are just millions of people still who are desperately looking for work. They’re eligible because they were working before. They’re looking for a job. This is not their fault. They’re not the ones who were packaging subprime securities. They didn’t ask to have a Great Recession. They didn’t ask to have to struggle with some of the hard legacy.

And the reality is that — look, we are obviously pleased that the economy has more momentum. We’re pleased to see unemployment overall coming down. We’re pleased to see private sector jobs coming up. But again, we work for a President who wants a stronger recovery and wants a recovery that leaves no one behind.

And we could be an administration that just comes in here and tells you nothing but the good news that’s happened, or the improvement. But that’s not what we’re about. We’re about helping people who are hardworking, responsible, and want to get back on their feet. And that’s why we’re willing to point out that even amidst the stronger economic news we’ve seen and the stronger economic momentum, there is a real challenge in long-term unemployment. And we care about those people and we’re going to do everything we can to help them.

Can I follow up? Have you been personally talking to some of the Republicans to help change their mindset as it relates to the extension of unemployment benefits?

Gene Sperling:
I would say many of us have been in contact with many people. I don’t want to reveal conversations. I obviously, as I mentioned, have been in conversations with Senator Heller and his chief of staff, but you can be sure that we are actively working this.

Gene, what does the vote count look like since you’ve been in touch with the co-sponsors of the legislation?

Gene Sperling:
I don’t know. I’m not here to predict, I’m here to tell you it should pass. I really think there were a lot of very moving stories that I’m sure a lot of the papers here and around the country were responsible for, and I think they were important because they didn’t just go through the numbers I did, they told the stories of real people and told stories of people with compelling stores. They put the names and faces of people that clearly are people that are responsible, hardworking, have fallen in a tough situation through no fault of their own and are trying to get back on their feet again. And that’s who we’re here to help.

As part of a larger discussion, are you open to — or is the White House open to further tapering the unemployment insurance program? There’s talk of wanting more reforms, phasing it out.

Gene Sperling:
I think I’d put that in the frame that I’ve put forward, which is we’ve got an urgent situation on our hands with 1.3 million Americans finding their benefits cut off. Let’s get this bipartisan three-months plan passed and, as I said, that will give us more time to have a broader discussion, a more in-depth conversation about how best to go forward after that.

Gene, can you talk a little bit, either you or Jay, about what the President has personally been doing since he’s been back to try to get this passed? Any calls to read out with anybody? And kind of talk a little bit about what the event tomorrow is supposed to do, vis-à-vis the votes that may or may not happen tonight.

Gene Sperling:
I can just tell you the President’s been active, and that he has —

Calling senators?

Gene Sperling:
He has made calls. But again, we don’t have much more to say after that because we’re doing what we can and sometimes that’s more helpful with private conversations.

Could the urgency have been avoided if the President had fought harder on the Ryan-Murray budget plan to have these included in the plan that was passed last month?

Gene Sperling:
I went back and looked at our efforts, and I found that the President of the United States had publicly called for extending emergency unemployment in 2014 seven times in 18 days — seven times in 18 days. I think I called for it first on November 14th, again on November 17th. The CEA Chair, Jason Furman, put out an entire report — I believe came into the briefing room and spoke to you about it. The President did a weekly address. He included it in his — a weekly address entirely on this issue. He included it on his statement on the agreement on Ryan-Murray. It was a significant part of his speech at CAP on inequality.

So I think the President and the administration made very, very clear how important we thought this was to get done. We’re not of the belief that the only way we should be able to work together is for somebody to threaten a shutdown. And so we made very, very clear that this ought to get done, and there’s lots of ways for it to get done. And the most clear and present way is for the United States Senate to start by passing the bipartisan Heller-Reed legislation that will be on the floor tonight.

But a veto threat isn’t a shutdown threat, and you’re talking about urgency. If they’re not getting checks today you still would have had a couple days to get a budget deal passed before the end of that timeline.

Gene Sperling:
Well, as I said, the President called for it seven times in 18 days. Just as many of us were leaving, Reed and Heller put their proposal forward. The President, from his vacation, called both senators, asked how he could help. The administration has been out there continually. So you may have noted that we don’t always have 100 percent control over the United States Congress. But I think the record is pretty clear that the President and his White House and the Secretary of Labor have aggressively been pushing for this both in December, both in the break, and as quickly as possible as we’ve returned.

Can I ask you one broad question? A lot of stories this weekend and today on the 50th anniversary of the War on Poverty. You served in the Clinton administration; you saw the Bush years and now the Obama years. These policies — I think the broader point, obviously — have been building for a long time, decades — the problem of poverty. But you were talking a moment ago about historic levels of long-term unemployment — 46 million people still in poverty. How much responsibility does the President bear after having five years in office for at least some of his policies to take hold?

Gene Sperling:
Well, look, on the broader question, I think there’s no question that the War on Poverty that Lyndon Johnson declared 50 years ago Wednesday has made very important advances. There’s just no question. I mean, in 1963, 51 percent of African Americans were in poverty and about 25 percent had graduated from high school. I think that one of the things you’ve heard us talk about and I think you’ll see Jason Furman, our Council of Economic Advisers talking about more is that the Bureau of Labor Statistics has now started — our government has started looking at a broader measure of poverty that makes sure that we’re looking at all the things that affect how people are doing, including things like earned income tax credit, food stamps. And I think when you look at that measure, that you would find that poverty has come down close to 40 percent, perhaps 35-40 percent since then.

So there has been important progress and I think it is important to understand that many of the things that have been done over the last 20 years have mattered. So, for example, when I came into — when I was first here in ’93, there was probably about 1.5 million-1.7 million Americans that were above the poverty line because of the earned income tax credit.

Now, because of measures that have been done over the last 20 years, including President Obama extending the earned income tax credit more for people with three children or more, reducing the marriage penalty and extending those, there’s 6 million people out of poverty. When you look at the refundable tax credits and the child tax credit and the ITC together, it may be as many as 9 million people not being in poverty.

Now, I think when you look over this, I think there’s no question over the last 50 years things have been done wrong, but I think we’ve learned from lessons. I think that both Democrats and Republicans have learned you have to look at — to make sure about the incentives you’re creating and that policies are better if they are designed to reward work. One of the reasons the earned income tax credit has been so important is that it’s an incentive for work. You get that assistance as you are working. It has positive incentives and it’s giving positive support for the program.

And just to give an example, going back to 1993, when you look at the alternative poverty measure, the broader poverty measure, the poverty rate was actually lower in 2010, 2011 than it was in ’93. So my first time in office here, a year or two after a very mild recession, poverty was higher than it was after the worst downturn since the Great Depression.

So, look, we should be judging and looking at all of the different things that we are doing. We should be willing to reform. But I think that there are things that this President has done that have made a big difference.

The Center for Budget and Policy Priorities estimated that as many as 8 million people are not in poverty because of things done in the Recovery Act. The fact that when we’ve been in these budget agreements, while everybody else is focused on what’s going to happen to the middle-class tax relief and the upper-income tax relief, that the President has made a priority to fight for extending the earned income tax credit, the refundable part of the American Opportunity tax credit, the child tax credit — has shown his commitment — there’s no politics in that, not even much attention, it’s just in his heart.

And I’ll tell you one other thing that would make a big difference. A very smart professor, Professor Dube, University Massachusetts Amherst, who just came out with a report that many of you saw in the last few days that said if we were to raise the minimum wage to $10.10 in the staged way it’s projected by the Harkin-Miller legislation, that that would lift 6.8 million people out of poverty; it would make them less dependent on government programs; it would not add to the deficit one penny but it would reward work and reduce poverty.

And those are some of the things that you’re going to hear from your President now in the State of the Union, and, more importantly, those are things that we’re going to fight to get done. And if anybody suggests that somehow we want to fight for the minimum wage or extending emergency unemployment for political reasons as opposed to it being the right thing to do, I have a really good solution: Let’s get them done right now in a bipartisan way. Then everybody can share credit in doing something that’s the right thing for the American people.

So thank you very much.


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