U.S. Must Extend Unemployment Benefits, Fix Free Trade

Feb 12, 2008 Issues: Trade

   In his State of the Union Address, the President said, “Our economy is undergoing a period of uncertainty.” But for millions of people across our state and country, our economic difficulties are very, very certain indeed.

   The economic stimulus package passed by Congress is an important bipartisan first step in addressing the serious economic challenges facing our entire nation. Nearly 4 million Michigan families will receive rebates, injecting $3.6 billion into Michigan’s economy.

   Yet what is seriously overlooked by the president and most congressional Republicans is that long-term unemployment is now twice as high as it was in the last recession. And nearly 1.3 million more people are expected to exhaust their unemployment insurance benefits in the first half of this year -- more than 72,000 in Michigan alone -- meaning that they will seek employment for six months and be unable to find it.

   We can help these workers -- laid off through no fault of their own -- while they look for a new job and effectively stimulate the economy at the same time. For every $1 spent on extended unemployment benefits, $1.64 is generated in increased economic activity. We must learn from past recessions when we waited far too long to extend unemployment and act now.

   The full attention of Congress on domestic and international economic issues is long overdue. We must not ignore the manufacturing jobs crisis that has resulted in the loss of 3 million good paying jobs since 2001. We must have a federal partner that fights to shape the terms of globalization so that we maximize the benefits and minimize the downsides for United States and Michigan businesses and workers.

   Last year, the new Democratic majority insisted in discussions with the Bush administration on a breakthrough in a new U.S. trade policy. The inclusion of fully enforceable labor and environmental standards in the U.S.-Peru Free Trade Agreement was the first step in a muchneeded course correction that Democrats have been fighting to achieve for more than a decade.

   Our trading relationship with China has been another test of American trade policy. The U.S. trade deficit with China was on course to reach yet another record high for 2007. From January through November, our deficit was $238 billion, compared with $214 billion for the same period in 2006.

   With historic intervention in the currency market, rampant trade distorting subsidies and massive intellectual property rights violations, China has violated sustainable, viable rules of international competition.

   The reactive, hands-off approach of the administration has not produced any significant progress to date, so active congressional participation is overdue to help chart the search for solutions for balancing the playing field between China and the United States.

   In the era of globalization, in addition to good trade policies, we must also have programs that fully support workers in transition. Last fall, the House of Representatives approved a complete overhaul of the Trade Adjustment Assistance program, a program that helps those who lose their jobs as a result of globalization. With the approved changes, TAA would cover many more workers, provide much more effective training, and eliminate the burdensome rules that prevent workers from accessing the program.

   Rather than basically more of the same, the certainty of the problems in our economy requires new policies. The need for short-term stimulus is certain. The immediate, stimulating effect of extending unemployment benefits is quite certain. And, most certainly, with proper domestic investments and effective international trade policies, we can achieve real, long-term economic stimulus.

   U.S. Rep. Sander Levin represents the 12th Congressional District, which covers much of southern Macomb County and parts of Oakland County.