Dems try changing subject with jobless benefits, wage bills – but are they needed?

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New fight over unemployment benefits

Debate over extension heats up

Reeling from public dissatisfaction with ObamaCare, Senate Democrats hope to change the subject when they return in the new year, with a proposal to raise the minimum wage by 40 percent and another to extend long-term unemployment benefits for three months.

But Democrats face two big hurdles. One is House Republicans skeptical of both measures. The other is Democrats' own claims about the economy itself.

Democrats have touted modest progress in the economy lately, and critics ask: If it's doing as well as Democrats claim, why are those bills needed?

"Extending unemployment insurance isn't going to help," said Glenn Hubbard, chairman of the Council of Economic Advisers under the George W. Bush administration.

The economy still is on shaky ground, but Democrats may struggle to convince colleagues that more emergency economic measures are needed.

The current jobless benefits extension runs out Dec. 28. Of the proposed extension, Senate Majority Leader Harry Reid said, "There is no greater challenge in this country than income inequality, and we must do something about it."

There is strong evidence, though, the economy is picking up.

The Commerce Department on Tuesday reported that November's orders for durable goods beat expectations, rising 3.5 percent. A new housing sales report sent mixed signals, with sales dipping 2.1 percent in November from a five-year high in October. The unemployment rate has sunk to 7 percent -- still high, but moving in the right direction. And the budget deal worked out in Congress this month removes some budget uncertainty.

"The important thing about this budget deal is the damage that the government did not do," said Jon Hilsenrath of the Wall Street Journal.

Just before the House recessed for the holidays, House Speaker John Boehner said he could support the extension under certain conditions.

"As long as it's paid for and as long as there are other efforts to help get the economy moving once again," he said. "I have not seen a plan from the White House that meets those standards."

President Obama also pushed for the unemployment extension before he left for his Hawaiian vacation. "More than one million Americans are poised to lose a vital source of income just a few days after Christmas," he said. "For many people who are still looking for work, unemployment insurance is a lifeline that can make the difference between temporary hardship or lasting catastrophe."

Democrats also want to raise the minimum wage from its current level of $7.25 an hour. They could push to raise that rate above $10.

But the great unknown remains ObamaCare's effect on the economy.

"So this is a real wild card. We don't know how many people are going to be affected by all the turmoil in the health care market that results from ObamaCare," Hilsenrath said.

One ominous sign lurks among the demographic that ObamaCare depends on most -- the young and healthy.

The Federal Reserve Bank of New York reports that in the third quarter, student loan delinquencies skyrocketed to 11.8 percent -- while delinquencies trended lower in all other consumer areas. The administration is still struggling to convince that demographic to purchase health care under the Affordable Care Act.