PERSPECTIVE ON THE POLITICAL PROCESS : Parties Posture, the Jobless Suffer : The phony, protracted fight over unemployment insurance shows that Americans have every right to loathe politics.

The fight between Democrats and Republicans over the extension of unemployment benefits provides a perfect example of “Why Americans Hate Politics,” a phenomenon so well described in E. J. Dionne’s book of the same name. Americans, claims Dionne, are fed up with the divisiveness of our politics, where smear tactics and name-calling are the tools of the trade. Both liberals and conservatives are blamed for confronting Americans with a series of false choices that fail to reflect genuine values and concerns. “We are suffering,” Dionne writes, “from a false polarization in our politics, in which liberals and conservatives keep arguing about the same things when the country wants to move on.”

Although the Democrats and Republicans seem, this week, to be near agreement on a plan to provide up to 20 weeks of extended unemployment benefits at a cost of about $5.1 billion, they could have resolved the issue in July, when legislation on the matter first appeared, and moved on. Instead, the two sides bogged down in a bitter and protracted dispute. The rhetoric has been familiar: Democrats portray Republicans as unconcerned with domestic affairs and the welfare of those in need; Republicans depict Democrats as fiscally irresponsible. “We are now engaged in a cynical political game,” as Minnesota Sen. Dave Durenberger pointed out last month, “where unemployed Americans are being held hostage to larger political concerns.”

Until the recent negotiations, most of the struggle had centered on a Democrat-supported bill vetoed by President Bush on Oct. 11. The bill, which lacked sufficient Republican votes in the Senate to override the veto, would have provided up to 20 of weeks of extended unemployment compensation for workers who have exhausted the standard 26 weeks. The White House, backed by most Republicans, claimed that, at $6.4 billion, not only was the bill too expensive, but it would “bust” the budget. By this, the Bush Administration meant that the plan would violate the budget agreement, which requires that any new expenditures be offset by matching revenues and/or spending cuts. It also argued that the current recession did not justify declaring an emergency, which would exempt the outlays from last year’s budget pact.

With few exceptions, Democrats insisted that their bill did not represent new spending. It would merely appropriate, they explained, some of the $8 billion in federal unemployment taxes built up in the insurance trust fund. Republicans unsuccessfully pushed an alternative bill, introduced by Senate Minority Leader Bob Dole, which they claimed would not violate the budget deal. Extending benefits by about half the weeks of the Democratic proposal, Dole’s plan would raise the necessary revenues by auctioning off some unallocated frequencies in the electromagnetic (radio wave) spectrum and by having the IRS withhold tax refunds to those who have defaulted on government-financed student loans.

Whatever one thinks about the merits of extending unemployment benefits, the arguments made by both parties have been disingenuous. Let’s begin with the charge that any of these proposals could “bust” the budget. Does this mean that, despite a federal debt approaching $4 trillion and an annual deficit nearing $300 billion, the budget is currently not busted? And that either the $6.4-billion Democratic proposal or the $3.1-billion Republican counteroffer would suddenly have busted it? After years of revising, fudging and just plain ignoring the Gramm-Rudman law, this born-again concern about adhering to a budget agreement was at best hypocritical.

What about the Democrats’ trust-fund argument? The Democrats were correct about the unspent surplus. But the implicit suggestion that spending it would somehow not increase the debt is false. The government is in debt--money on the books is not money in the bank. New expenditures require additional revenues. Without taxes or some other new source of income, these revenues must come from more borrowing, which further increases the debt.

The Republicans’ plan was also a half-truth. True, it did not require new taxes or borrowing. But selling airwaves depletes valuable government assets, and receipts from such sales should not be considered ordinary revenues. Economist Gordon Tullock calls this the “Thatcher error.” Margaret Thatcher’s government sold off considerable government property and counted the gains as simple income. As a result, Britain’s budget appeared balanced, but this is an accounting ruse. Imagine that you sold your home, and that after paying off the mortgage you netted $50,000. Would you feel that you had “earned” $50,000 more this year?

But it’s not only these arguments that were less than candid. The intentions underlying them were suspect as well. Bush and members of both parties claimed that they desperately wanted to help the unemployed by extending their benefits. The unfortunate reality is that each party has been more interested in not giving in to the “other side” than in honoring any commitment to those who are out of work.

Both parties have denied trying to gain political advantage. Democrats claim that they were trying to get a fair deal for the unemployed. Republicans plead that they were also trying to help the unemployed, while maintaining fiscal responsibility. But instead of persuading us, these politicians have trapped themselves in hollow rhetoric.

What they have really done is distract themselves and us from crucial related issues. Yes, the immediate policy question is benefit extension. But there are other important ones concerning unemployment insurance itself.

First, in the current recession, only about half of the jobless are covered by unemployment insurance, compared with more than three-quarters during the mid-1970s downturn. And levels of compensation have failed to keep pace with inflation.

Most important, however, is the failure to link unemployment insurance to employment policy. Unemployment benefits give short-term economic security to those out of work. But only jobs provide long-term protection and prosperity. And unemployment insurance, as currently structured, offers little or nothing in the way of skill-enhancing education and training. Given the rapid and inevitable erosion of high-wage, low-skill manufacturing jobs, this is a recipe for misery.