One day before Friday's dismal jobs report confirmed the pace of the U.S. recovery has slowed, House Speaker Nancy Pelosi called for the extension of unemployment benefits to "injects demand into the economy." But while the Republicans who have blocked the $112 billion package including the jobless benefits mocked her for it, Americans don't have to take her word that "it creates jobs faster than almost any other initiative you can name." After all, it's not just the Congressional Budget Office that reached that conclusion. Mark Zandi, one of the key economic advisers to GOP presidential candidate John McCain, has repeatedly made the same point.
In June, a survey by the National Employment Law Project found that 74% of respondents agreed that "With unemployment close to ten percent and millions still out of work, it is too early to start cutting back benefits and health coverage for workers who lost their jobs." And during his Senate Finance Committee testimony in April, Zandi of Moody's Economy.com echoed that concern:

"It would be desirable if the costs of the [unemployment] benefits were paid for, not now but in the future once the economic expansion is in full swing,"

Asked if he disagreed with the Republican rejection of the current proposals to extend unemployment benefits without an offset elsewhere in the budget, Zandi responded:

"Yes, it would be counterproductive to try and offset it this year or the next."

Of course, by now Zandi's backing of Congressional Democrats on this point should come as no surprise. Even before President Obama took the oath of office, Zandi on November 19, 2008 testified before the U.S. Senate Budget Committee in support of a large federal stimulus program. Appearing before the Joint Economic Committee on October 29, 2009, Zandi presented "The Impact of the Recovery Act on Economic Growth." In his statement, he made clear that with an estimated $1.61 in economic gains for every dollar invested:

The part of the stimulus providing the biggest bang for the buck--the most economic activity per federal dollar spent--is the extension of unemployment insurance benefits (see Table 3). Workers who lose their jobs before the end of 2009 can temporarily receive more UI, food stamps, and help with health insurance payments. Without this extra help, laid-off workers and their families would be slashing their own spending, leading to the loss of even more jobs.

And in his Table 3 (presented below), Zandi's model showed that with a 1.41 multiplier, "Federal aid to strapped state and local governments also is providing significant economic benefits, lessening their need to slash programs and jobs or to hike taxes and fees."

If that sounds a lot like the $112 billion Democratic package of jobless benefits and aid to the states, it should. And even with up to three million Americans set to lose unemployment checks by month end and an estimated 900,000 jobs at risk as states slash their spending, Senate Republicans are still saying no.
But if the word of McCain economist Mark Zandi doesn't carry sufficient weight with the Republicans, similar findings from the nonpartisan Congressional Budget Office won't change their minds. In February, a CBO model of historical data reaffirmed Zandi's conclusion that unemployment benefits and federal grants to the states buy the biggest bang for the federal stimulus buck. Like Zandi, the CBO also found that tax cut provisions so beloved by the GOP had a much smaller impact on fueling the recovery:

For his part, Michigan Rep. Dave Camp, one of the legions of Republicans who voted their approval as President Bush nearly doubled the national debt, called the proposal to add to the deficit by extending unemployment benefits, "fiscal insanity."
But the millions of Americans staring into the financial abyss as the Fourth of July arrives without help from Congressional Republicans would beg to differ.