Income security is bad in the U.S., with unemployment and foreclosures unabated, and 1 in 4 Americans relying on government food assistance. But it could have been--and still could be--a lot worse, according to the CBO.
WASHINGTON -- Extended unemployment insurance put in place to fight the recession prevented the poverty rate from rising to 15.4 percent in 2009, a level unseen since the 1960s, according to the Congressional Budget Office. The government announced in September that that the 2009 poverty rate had risen to 14.3 percent from 13.2 percent the previous year.
The CBO's analysis, produced at the request of Rep. Jim McDermott (D-Wash.), chairman of the House Ways and Means subcommittee on Income and Family Support, shows that unemployment insurance is essentially a middle-class benefit. Households with total income more than twice the poverty threshold accounted for 70 percent of the $120 billion the government spent on unemployment benefits last year. Families with income below the poverty threshold received eight percent of all benefits.
It's a big chunk of the economy at stake with unemployment benefits that are about to expire. Two million people will be cut off by the end of the year if Congress doesn't act soon. Everyone knows the drill by now--we all know by now that unemployments benefits have a greater impact on the economy than tax cuts. We know that those benefits are going to be critical to keeping up consumer demand during the holiday season--the most important period of the year for retailers. And now we know that the poverty rate could shoot skyward without the extension of these benefits.
We also know that the GOP is fine with that. The worse the economy is, the likelier they think it is that they'll retake the Senate and White House in 2012. That's the number one thing on their agenda.