7-22-08, 2:22 pm

In the face of the latest disturbing economic news, congressional Democrats are crafting a second stimulus package, according to AFSCME's GreenLine Blog. Discussions on how to proceed with a new stimulus package began this week with meetings between Democratic leaders and economists.

House Speaker Nancy Pelosi reportedly said the second package would 'include aid for states suffering declining tax revenues and help with the states’ share of costs for Medicaid services to the poor as well as transportation infrastructure, public schools and other public facilities.' Other provisions include additional funds for the Low Income Home Energy Assistance Program (LIHEAP) which helps working families afford rising home energy costs.

Many such provisions were deleted from the first stimulus package passed earlier this year after Bush administration veto threats and Senate Republican filibuster threats.

This past week the federal government sent out the first round of unemployment checks as part of the recently passed extension of unemployment benefits for the estimated 900,000 unemployed workers who have exhausted their unemployment insurance compensation eligibility.

The National Employment Law Project estimates that as many as 2.7 million more workers could see their benefits expire without finding work if the economy isn't turned around.

Ultimately, 3.5 million unemployed workers could benefit from the benefits extension, which will continue until March 2009.

Last week, on a teleconference with reporters, one of the congressional architects of both the unemployment compensation extension and the stimulus packages, Rep. Jim McDermott (D-WA), discussed the importance of assisting unemployed workers and the need for a second stimulus package.

'That's money that goes immediately into the economy,' he noted. 'Rebate checks have a kind of limited value. But the unemployment thing, if you give that to somebody who has just lost their job, they spend it the next day on rent and food. That makes a much better stimulus package.'

'I don't think there's any indication that this is going to be a short-term downturn,' he said. 'There should have been an additional 13 weeks for states with high unemployment rates, like California, Michigan, District of Columbia which are are over 7 percent already,' McDermott added.

McDermott predicted Congress would take up a second stimulus package in September or immediately following the election. He also said that Congress needs to tackle gasoline prices using something like 'energy stamps' as a subsidy for low-income working families.

The unemployment benefits extension and stimulus package will help Michael Cottle, a long-term unemployed worker who worked as an information technology consultant in New Jersey. Cottle talked about the hardships in today's economy.

Despite his good qualifications, experience and training, he said, his industry has such a large labor pool with too few jobs available that he hasn't been able to find employment.

'As the saying goes,' he said, 'somebody usually gets lost in the shuffle. Right now it's me and a whole lot of other people.'

'It almost makes a person feel like what's wrong with me?,' Cottle added. 'But now that I see what's going on with the economy and everyone else is having the same problem, I don't think it's what's wrong with us. It's something that's going on with the country.'

Initial Republican opposition to the unemployment benefits extension did not surprise Jeremy Funk of Americans United for Change. 'It was the typical conservative response to governance,' he noted. 'Bail out Bear Stearns, oh sure, but when it comes to ordinary working Americans, forget about it.'

Maurice Emsellem, policy co-director of the National Employment Law Project, praised early congressional action to assist hurting workers and which may forestall deeper recession.

--Reach Joel Wendland at