Jobless Benefits Save Jobs, Economy: White House Economists

toggle caption Jim Prisching/AP Photographer

Not extending federal unemployment insurance benefits will cost the economy about 600,000 jobs as well as significantly slow economic growth, according to the Obama Administration's top economists.

The White House Council of Economic Advisers issued a report Thursday to provide statistical ammunition to congressional Democrats and their allies who are pushing for the extension.

Congresional Republicans, meanwhile, have said they want to offset the cost of extending benefits, estimated at about $56 billion, with spending cuts elsewhere in the federal budget.

Senate Republicans are also insisting that their top agenda items are extending the Bush tax cuts and passing legislation to "fund the government" before taking up any other legislation, including, presumably, unemployment insurance.

A key point in the report is that jobless benefits actually help keep others employed by creating spending that otherwise wouldn't exist.

For instance, the report says that without the benefits, the unemployed would spend 22 percent less on food than the seven percent.

The report also notes that 40 million people have been helped during the Great Recession by the federal unemployment benefits which kicked in after many of the income earners exhausted their 26-weeks of state unemployment benefits. About 10.5 million of those people were children.

An excerpt from the report: