I'm using the word "progressive" in the sense of "progressive taxation" The analogy is with the full range of income tax, where for the negative tax segment those with greater need obtain greater government benefit (more payments) and those with less need (higher income) obtain less government benefit (higher taxes)
Welfare, direct payments to families based on need, is designed to be progressive, while unemployment compensation was never designed as such. Like Social Security, it is modeled after insurance, where those who contribute most, correlated with earning the most, obtain the most benefits. It may be no accident that the term Unemployment Insurance is being replaced by Compensation
I don't want to overstate my point, since based on net worth, or overall income, the proceeds from unemployment insurance are more important to the poor than to the rich. But, in absolute terms, those who are richer, those who earned more when they worked, get more taxpayers money when they receive unemployment insurance.
This is an important point to raise at this time because the Obama Tax Compromise being debated uses funding for extended unemployment insurance, a regressive expenditure, to balance lower taxes for the rich, by definition, also regressive.
When the President talks about this, and when Bernie Sanders spoke today, the assumption was that extended unemployment compensation would bail out those in most desperate straits. Sometimes it will, but sometimes it will not. What makes this a difficult subject is that the theory of U.S. unemployment benefits is that it would be insurance paid for by employee and employer without taxpayer funding. With the extension, it becomes a hybrid, part entitlement and part insurance. But the amount of payment is still based on the insurance model, even though the funding for the extension is now from the taxpayer.
Each of our fifty states has it's own rules, procedures and regulations, but the principles are the same, the more you contributed, the higher your earnings, the more you receive. Unemployment Insurance Compensation is quite complex, as each state has it's own unique rules, payments and standards with the maximum weekly rate of payment varies widely, from $900 down to $250. So at the very highest levels someone who had been making over six figures annually, and who has considerable assets or a high income spouse will still receive up to $50,000 a year.
We treat Unemployment as if it were a welfare program, and in other countries there are elements of this, as described in this article. There are countries that consider a spouses income, or number of children in determining benefits, but not in the U.S.
If there is to be a trade-off for providing government benefit to the wealthiest 2%, at the very least it should be in the form of a program that exclusively helps the poorest. There is such a program. It's called welfare. It must be a program with means testing, so that a person who loses his/her job is not given aid if there are other sources of income or wealth.
I no longer personally blame the president for this compromise, as he attempted to have a tax bill passed based on his campaign promise, but did not have the support of Democratic Senators.
But subtext matters. Even beyond my fiscal argument, he explicitly said that when faced with a threat, he will not allow harm to come to the hostage, in this case our country. The principle of "not negotiating with terrorist" is not negated when, as he said, "it looks like the hostages will be hurt." In fact, that's exactly when the principle means something.
Unemployment compensation is not a social safety net, even if it is framed this way by our President. The benefits are too little for many and too much for some. "Welfare" is too hot a term to be advocated, so we are pretending that unemployment compensation will solve the same problem. This is an illusion.
This Tax Compromise proposal leaves those who need help the most out in the cold, while helping the most wealthy and increasing the deficit. It could be that given public perceptions and political realities this is the best that we can do. If so, it's pretty sad.