Since the beginning of the year, when talk of a recession was first heard, Congress has been debating whether or to extend unemployment insurance (UI) benefits by 13 weeks -- as it has done during every single recession, with one exception, for the past 50 years.

The principal objection to such a proposal, which Bush opposed in the winter stimulus package is, as the White House press secretary said last month, that the president doesn't believe the extension is needed, "given that the unemployment rate that we have is historically and relatively low at just over 5 percent." (Note that the first bill Bush signed after the election of a GOP Congress in 2003 was -- that's right -- a 13-week unemployment insurance extension... when the rate was 5.8 percent.)

But increasingly, the focus of the UI extension debate is shifting away from the unemployment rate to what seems like a more logical barometer of the need for an extension: how long it takes to find a new job.

The latest voice to join that chorus is mainstream economics writer Robert Samuelson, opining in today's Washington Post:

When benefits were extended in early 2002, the unemployment rate was 5.7 percent. In 1991 the extension occurred at 7 percent. But so what?

What's wrong with this argument is that it ignores basic changes in U.S. labor markets. Over the past two decades, American businesses have gradually toughened their hiring and firing policies. In recessions, they resort more to permanent dismissals as opposed to temporary layoffs; in recoveries, they're more cautious in adding new workers.

It's harder to find a new job. Average spells of unemployment have slowly lengthened. The increase since 1960 has been about six weeks, estimates economist Gary Burtless of the Brookings Institution.

Nearly 1.4 million U.S. workers qualified as long-term jobless at the beginning of the year, more than twice as many as when the recession started in March 2001 -- and more than the 1.3 million who were long-term jobless the last time Congress temporarily extended benefits, in March 2002. In this environment, is the unemployment rate, per se, a logical reason not to extend unemployment benefits?

Yesterday, we noted that the FBI raided the home and office of Office of Special Counsel Scott Bloch. More news reports on the raids are out today. It appears that raids are part of a grand jury subpoenas related to the OSC's investigation of the use of federal resources for political activities by the White House, including Bloch's investigation of now-fired GSA head Lurita Doan.

The participation of the FBI and the grand jury, which is empaneled in Washington, indicates investigators are weighing criminal charges related to the [Office of Personnel Management] IG probe [of allegations by former OSC employees who say Bloch retaliated against them], such as obstruction of justice.

But OSC employees said the grand jury subpoenas seek a wide range of information that goes beyond Bloch's deletion of computer files or treatment of agency employees.

Investigators have demanded all files on OSC's investigation last year into allegations of improper political activity by Lurita Doan, the former head of the General Services Administration, who was forced to resign last week by the White House.

This bit in the CongressDaily (via GovExec) article deserves highlighting:

Republicans and other critics also have criticized Bloch for launching a wider investigation into political briefings White House officials conducted across the federal government. They have accused Bloch of trying to use the probe as leverage against possible moves by the White House to force his ouster due to his conduct at OSC.

Anyway, here are a couple more articles on the raids:

The New York Times, "F.B.I. Raids Office of Special Counsel"
McClatchy, "FBI agents sweep office, home of government watchdog"

After sending mixed signals for weeks about H.R. 5830, the Frank FHA mortgage refinaince loan guarantee program, President Bush issued a Statement of Administration Policy (SAP) opposing a number of provisions in the housing stimulus package (H.R. 3221) being considered on the House floor today and declaring that he would veto the package in its current form.

Ironically, the elements in the bill intended to draw bipartisan support are "modernizing" the FHA and more stringent oversight of Fannie Mae and Freddie Mac, the two government-sponsored enterprises (GSEs) that guarantee the purchase and sale of home mortgages in the secondary market. But the administration statement called the inclusion of FHA modernization and GSE reform "largely symbolic" and said Frank's FHA rescue plan "would force FHA and taxpayers to take on excessive risk, and jeopardize FHA's financial solvency."

Yet, even in the worse case, the risk to taxpayers as estimated by the Congressional Budget Office could come to as much as $1.7 billion over five years, or roughly $400 million a year. Since there are over 100 million "tax units" in the U.S. (individuals plus households paying taxes), the Frank plan would, at most, cost the average taxpayer $4 dollars a year. How much of a risk is that against the backdrop of what Princeton Prof. Paul Krugman projects will be $6-7 trillion in home equity value lost in the housing crisis?

The SAP may be more of a veto threat than a promise in the end. As Jaret Seiberg, senior vice president at the Stanford Group, a Washington policy research firm told CNN this afternoon, "We see this more as an effort to gain leverage over the final shape of the bill and less about an actual veto. The politics of killing this bill are negative for the Republicans, who very much need to win either Ohio or Florida if they hope to keep the White House in November. Both of those states are suffering severely during the housing mess."

Stay tuned.

The gas tax holiday proposed by Sens. John McCain (R-AZ) and Hillary Clinton (D-NY) has been universally panned by experts, economists and elitists of all political stripes.

Now comes a novel objection from perhaps the most famous of all pundits, certainly one with a bigger media footprint than all the others who have opined to date.

"The gas tax holiday? It doesn't go far enough!" grouses Stephen Colbert. His argument is neatly laid out in a presentation made to "nation," in Stephen Colbert's Gas Tax Holiday.

Budget -- Conferees Converge on Compromise, per Conrad: Senate Budget Chairman Kent Conrad (D-ND) said yesterday that FY09 budget resolution negotiators have only one remaining issue to resolve —— the level of discretionary spending for fiscal 2009 —— before reaching an accord. He said said the difference in discretionary spending between the House and Senate fiscal 2009 budget resolutions is about $1.8 billion now, down from a $4 billion gap at the outset. Background on Budget Debate.

Housing -- CBO Releases Frank Bill Cost Estimate: The Congressional Budget Office has released its long-awaited cost estimate of H.R. 5830, the FHA Housing Stabilization and Homeownership Retention Act of 2008, the bill introduced by House Financial Services Committee chair Rep. Barney Frank (D-MA) to create a voluntary FHA mortgage refinance program. The full House will consider the bill today. CBO's estimate of the bill's five-year cost: $2.7 billion.

Supplemental Schedule -- House Vote, Senate Mark-Up Ahead: House Democratic leaders have signaled possible floor action tomorrow on a supplemental appropriations bill that would provide $108.1 billion in fiscal 2008 and $70 billion in 2009 war funding and includes extended unemployment benefits and new education benefits for veterans, upping the price tag above Bush's target. The Senate Appropriations Committee announced plans to mark up its own version of the supplemental tomorrow. CBS News.

House Majority Leader Steny Hoyer (D-MD) and House Appropriations Chair David Obey (D-WI) told lawmakers today that Democratic House leadership will advance a $183.6 billion war supplemental spending bill. It combines the remainder of President Bush's FY 2008 request and his partial FY 2009 request and will fund the wars in Iraq an Afghanistan through the remainder of Bush's term.

The bill, which could be voted on early as Thursday, includes several domestic spending provisions:

• $11 billion (over 10 years) for unemployment insurance expansion
• $720 million (over 2 year) for expanded GI Bill benefits
• About $1.3 billion in international food aid
• A Bush-requested $5.8 billion for New Orleans levy repair

To remain under Bush's veto-threatened limit, $3.4 billion less than his request was provided to the military.

CQ Politics, Democrats Unveil War Supplemental Plans
CQ ($), Democrats Unveil War Supplemental Plans
CongressDaily PM ($), Dems Prepare $183.6B Supplemental, May Vote Thursday

Wow.

FBI agents on Tuesday raided the offices of Special Counsel Scott J. Bloch, who oversees protection for federal whistleblowers. The agents seized computers and shut down email service as part of an obstruction of justice probe, NPR has exclusively learned.

FBI agents also searched Bloch's home and a Special Counsel field office in Dallas. A grand jury in Washington issued subpoenas for several OSC employees, including Bloch, according to NPR sources who spoke on condition their names not be used.

Those developments came about on a Tuesday morning that had seemed no different than any other weekday in the Washington headquarters of the Office of Special Counsel. But at 10 a.m., the OSC's national email system went down, and the FBI arrived.

And from TPM Muckraker, a reminder of what Bloch's deal is:

To refresh your memory, Bloch's agency is a little known one that is charged with investigating whistleblower complaints, Hatch Act violations, and the like -- but who is himself being investigated for retaliating against whistleblowers and politicizing his office. The Office of Personnel Management's inspector general has been conducting that investigation since 2005. The feds are apparently investigating whether Bloch tried to obstruct that investigation by deleting his hard drive, among other things.

To give you an idea how fraught this investigation is with unique issues, Bloch is not only busily investigating the White House for political briefings Karl Rove and his aides made to various agencies, but he's also conducting an investigation of the politicization at the Department of Justice and issues related to the U.S. Attorney firings -- a probe that he complained was being blocked by the DoJ. Of course, he can't do much to block the DoJ investigation of him.

We last wrote about Bloch in November, when the WSJ reported that he was being investigated for shredding documents (i.e. "a 'seven-level' wipe [of several office hard drives]: a thorough scrubbing that conforms to Defense Department data-security standards).

Congressional opposition to the Frank housing bill is coalescing around apparently dubious propositions ($).

[Antonia Ferrier, spokeswoman for House Minority Whip Roy Blunt (R-MO)] also took aim at the [Rep. Barney] Frank proposal. "This bill perversely rewards those who borrowed more than they could afford — their monthly mortgage payments get reduced with the government footing the bill. How is that fair to the millions of Americans who worked hard and paid their mortgages on time? And who ends up holding the bag if all goes south? No surprise, the American taxpayer."

Meanwhile, economist and Fed Chief Ben Bernanke provides an "expert" opinion:

"High rates of delinquency and foreclosure can have substantial spillover effects on the housing market, the financial markets and the broader economy," [Federal Reserve Chairman Ben] Bernanke said Monday..."Therefore, doing what we can to avoid preventable foreclosures is not just in the interest of lenders and borrowers. It's in everybody's interest," he said.

...

The current housing crises has clobbered some borrowers home prices dropped. That left them with mortgages that are bigger than the value of their home. When that's the primary problem, Bernanke said the best solution may be reducing the amount that the borrower owes on the loan or some other permanent modification to the loan.

Fine. Helping distressed homeowners can help everyone. But surely we cannot stand in the way of the the almighty market! That would be disaster.

Republican talking points obtained by Roll Call also suggested housing prices must fall further rather than be propped up by a new government program, an argument also made by [Sen. Richard Shelby (R-AL)] Shelby.

"The correction in the housing market is a necessary reaction to a prolonged period of reckless lending and borrowing practices that helped take housing prices to levels that were simply unsustainable. For the market to stabilize, prices will need to return to levels that ordinary Americans can afford," the talking points read.

Or not.

Rising foreclosures add to the glut of unsold homes and that put more downward pressure on prices, aggravating the housing slump, he said. More rapid declines in house prices could have an "adverse impact" on the broader economy and the stability of the financial system, [Bernanke] said.

Photo by Flickr user msabcmom used under a Creative Commons license