New Law Extends Unemployment Benefits, Critical for New York -- One of Three Steps This Week to Rebuild Economic Foundation

THE WHITE HOUSE

Office of Media Affairs

July 23, 2010

WASHINGTON – President Obama has signed legislation extending critical unemployment insurance to 2.5 million Americans – including an estimated 199,600 people in New York – who are looking for a job but have not been able to find work before their benefits were exhausted.

The extension of unemployment benefits was one of three important actions this week to help repair the damage to the nation’s economy from this recession, and rebuild it on a stronger foundation. Other key actions:

Wall Street Reform becomes law. This legislation contains the toughest financial reforms since the ones created in the aftermath of the Great Depression. It will bring greater accountability to Wall Street, and provide greater security to families and small businesses on Main Street. The financial industry is central to our nation’s ability to grow, prosper, compete, and innovate. This law will help to foster that innovation, not hamper it. These reforms will put in place the strongest consumer protections in history, which will be enforced by an independent agency whose sole job is to establish rules of the road and enforce these protections to look out for the American consumer. Because of financial reform, the American people will never again be asked to foot the bill for Wall Street’s mistakes. There will be no more taxpayer-funded bailouts -- period. If a large financial institution should ever fail, we will have the tools to wind it down without endangering the broader economy. And there will be new rules to prevent financial institutions from becoming “too big to fail” in the first place, so that we don’t have another AIG.

Government inefficiencies are a prime target. President Obama came into office determined to change the way Washington works for the American people. That means working to build a government that is more open, more transparent, and more responsive to the needs of its people; and that is focused on getting rid of the waste and inefficiencies that squander the hard-earned money of American taxpayers. One of the core responsibilities of government is to steward the tax dollars of the American people wisely and well. And yet each year, the federal government makes billions of dollars in improper payments to individuals, organizations, and contractors. That’s why the President signed into law this week the Improper Payment Elimination and Recovery Act, an important step toward realizing the President’s new goal of reducing improper payments by $50 billion between now and 2012. This bipartisan legislation requires every federal agency to conduct annual assessments to determine which of their programs are at risk of making improper payments; and to audit more of their programs and recapture more taxpayer dollars. And there are now rigorous enforcement mechanisms to hold agencies accountable for how much money they save.

The President’s full remarks follow:


I want to talk about the progress that we made this week on three fronts, as we work to repair the damage to our economy from this recession and build a stronger foundation for the future.

First, I signed a Wall Street reform bill that will protect consumers and our entire economy from the recklessness and irresponsibility that led to the worst recession since the Great Depression. It’s a reform that will help us put a stop to the abusive practices of mortgage lenders and credit card companies, and ensure that people get the straight, unvarnished information that they need before they take out a loan or open a credit card. It will bring the shadowy deals that caused the financial crisis into the light of day. And it will end taxpayer bailouts of Wall Street firms and give shareholders a say on executive compensation.

The need for this reform, by the way, was underscored by the report issued by Ken Feinberg this morning, identifying a number of financial companies that continue to pay out lavish bonuses at the height of the financial crisis even as they accepted billions of dollars in taxpayer assistance.


Second, I signed a law that will improve our ability to crack down on improper payments made by our government. Every year the government wastes tens of billions of dollars -- taxpayer dollars -- on erroneous payments to companies that haven't paid their taxes, or to prison inmates, or even to people who died a long time ago. Today we have the technology to block these payments. And the law I signed will give us new tools to do so. I've set a target to save at least $50 billion in -- by 2012, savings that are more important today than ever because we simply don't have any money to waste.

Third, we finally overcame the procedural blockade of a partisan minority in the Senate to restore unemployment insurance for about 2.5 million Americans who are out of work and looking for a job.


So, taken together, we made enormous progress this week on Wall Street reform, on making sure that we're eliminating waste and abuse in government, and in providing immediate assistance to people who are out there looking for work.

But ultimately, our goal is to make sure the people who are looking for a job can find a job. And that's why it’s so important for the Senate to pass the additional steps that I’ve asked for to cut taxes and expand lending for America’s small businesses, our most important engine for hiring and for growth. And a small business jobs bill that contains these measures may come up for a final vote in the Senate in the next few days.

With this small business bill, we’ll set up a new lending fund to help community banks offer small businessmen and women the loans they need to grow and to hire. We’ll help states encourage more private sector loans to small businesses in industries like manufacturing or construction that have been especially hard hit by this recession. We’ll expand our most successful small business initiatives and more than double the size of loans our small business owners can take out.

And to unlock the growth of our entrepreneurs, we’ll finally do what I’ve been advocating since I ran for President, which is to eliminate capital gains taxes entirely for key investments in small businesses.

Now, last night, after a series of partisan delays, the Senate took an important step forward by supporting a lending fund in the overall small business jobs bill. I want to thanks Senators Mary Landrieu and George Lemieux for their leadership and advocacy on behalf of the millions of small business people for whom this will make a meaningful difference. I was heartened that Senator LeMieux and Senator George Voinovich crossed party lines to help pass this lending provision last night, and I hope we can now finish the job and pass the small business jobs plan without delay and without additional partisan wrangling.

You know, the small businessmen and women who write to me every day, and the folks who I’ve met with across this country, they can’t afford any more political games. They need us to do what they sent us here to do. They didn't send us here to wage a never-ending campaign. They didn't send us here to do what’s best for our political party. They sent us here to do what’s best for the United States of America and all its citizens, whether Democrats or Republicans or independents. In other words, they sent us here to govern. And that's what I hope we will do in the remaining days before the Congress takes its August recess.

BACKGROUND: UNEMPLOYMENT INSURANCE EXTENSION

Since the first week of June, Senate Republicans had stonewalled the extension of unemployment benefits to 2.5 million Americans, including an estimated 199,600 people in New York. The Senate was able to overcome these parliamentary maneuvers in order to provide much-needed support to middle-class families.

Extending unemployment benefits expands local purchasing power. Economist Mark Zandi of Moody’s Economy.com put the economic multiplier of extending a dollar of unemployment benefits at 1.6, meaning that, for every dollar spent on unemployment compensation, $1.60 is added to our economy’s output. Similarly, the nonpartisan Congressional Budget Office places the multiplier in a range between 0.8 and 2.1.

Independent assessments from the National Federation of Independent Businesses and the Duke University/CFO Magazine survey have cited sales concerns and weak product demand as the largest concerns voiced by small businesses and corporate financial officers. The Duke survey found that 36.4 percent of the CFOs believed that weak consumer demand was the top macro concern for their corporation – more than 18 percentage points higher than any other listed concern.