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'Welfare for the wealthy' is unjustified

Oct. 06, 2012 @ 12:00 AM

If Congress wants to whittle away at federal government spending, one step would be to pass a law that forbids millionaires from receiving unemployment benefits.

Yes, you read that correctly.

The Congressional Research Service has released a study showing that in 2009 nearly 2,400 people in households with annual incomes of $1 million or more reported on their tax returns that they received jobless benefits. That wasn't a one-year fluke. The Internal Revenue Service says that 2,840 millionaire households received unemployment benefits in 2008, according to a report by Bloomberg News.

U.S. Sen. Tom Coburn, a Republican from Oklahoma, described the situation aptly: "Sending millionaires unemployment checks is a case study in out-of-control spending," he wrote in an email to Bloomberg News. "Providing welfare to the wealthy undermines the program for those who need it most while burdening future generations with senseless debt."

There are millions of people who are out of jobs and truly need the help. But extending such a safety net benefit to people who already have plenty of safety nets just doesn't make sense. Someone living in a household with an annual income of $1 million has other resources to tap.

The Research Service said ending the practice would save the government about $20 million over the next decade. That's a small amount in relation to total government spending, but it's a spending cut that is easily justified.

The House and the Senate have had proposals introduced to target this issue, but none has made it into law. Clearly, an end should be brought to paying jobless benefits to members of high-income households, and Congress should act quickly to do so.

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