Who gets jobless benefits?

The fight in Congress over whether to extend the temporary payroll tax cut has focused in part on the unrelated issues that House Republicans have tied to the measure — most notably the proposed Keystone XL pipeline — and in part on how to make up for the lost revenue. Democrats want to cover the estimated $121-billion tab mainly by raising taxes on the wealthy; Republicans want to cut spending, mainly by reducing federal workers and freezing the pay of those who remain. In a nod to the Democrats’ populism, however, the House GOP has also proposed to claw back the unemployment benefits paid to people with income of $1 million or more. It might sound like common sense, but it’s bad policy.

Unemployment insurance is financed primarily by taxes that employers pay, the cost of which is typically passed on to workers in the form of lower salaries. States determine how much to pay laid-off workers (the average is a little less than half their previous weekly wage, up to a cap of $450 a week in California) and how long to provide benefits (26 weeks is the norm). The federal government offers extra weeks of benefits during periods of high unemployment. If the demand for benefits outstrips the supply of tax dollars, Washington kicks in money from the general fund.

The federal government now provides up to 73 weeks of extended benefits in California and other states with high unemployment rates, but those benefits are set to expire Jan. 1. The House payroll-tax bill would renew only some of the extra benefits, providing 30 to 43 weeks. It also would set new restrictions on who could receive any state or federal aid, including a requirement that recipients have a high school diploma or the equivalent. And it would impose a 100% tax on the benefits collected by people with million-dollar incomes.

Lawmakers shouldn’t roll back unemployment benefits when there are still so many more idled workers than job openings. Doing so would put another hurdle in the struggling economy’s path . In addition, the proposed restrictions interfere with states’ ability to determine who should be eligible for benefits, an issue that has always been within their purview. More important, unemployment programs are insurance, not welfare. Employers of all stripes — and, by extension, their employees — pay in on the same terms, in anticipation of equal benefits.

In that sense, the unemployment insurance program is like Social Security. It is not designed to reallocate wealth, but to provide a basic level of protection against financial risk. Workers who pay into the program, directly or indirectly, should be entitled to its benefits, regardless of how much income or how little education they have.