Federal Unemployment Program Expires

Wednesday, December 1, 2010 at 5:10 PM by

As of today, it’s official: The program that provides federal benefits to long-term unemployed workers has expired. There’s hope for the program to be revived, but until then, long-term unemployed workers are getting no further help making ends meet.

Unemployment benefits are provided at both the state and federal levels. In normal times, unemployed workers get 26 weeks of unemployment benefits at the state level. During economic downturns, Congress creates a temporary program to help provide benefits beyond the 26 weeks. In the current recession, federal benefits maxed out at up to 73 weeks, for a total of 99 weeks (26 + 73) between state and federal benefits. Letting the federal unemployment benefits program expire at this point means unemployed workers will not have access to benefits beyond the 26 weeks provided by the state.

A good article in the Racine Journal Times by Michael Burke examines the hardship and worry of a Racine County family about to lose their UI benefits. The article cites DWD statistics indicating that nearly 56 percent of the people in WI receiving UI benefits are getting the extended federal benefits.

The federal unemployment benefits program is meant to be temporary, but now is not the time to let benefits lapse. The economic recovery is too fragile and the unemployment rate is too high. In recoveries from past recessions, Congress never ended the federal unemployment benefits when the unemployment rate was more than 7.2 percent; today the unemployment rate is 9.6 percent. There simply aren’t enough jobs out there yet for Congress to justify ending the federal extended benefits.

Continuing the extended UI benefits is important not only for the jobless workers who are directly affected, but also for the nation’s economic recovery. Failing to provide federally supported UI benefits for another year could drain as much as $80 billion of purchasing power from the US economy and hold down job creation, costing 1 million or more jobs. (See Emergency Unemployment Insurance Benefits Remain Critical for the Economy, Center on Budget and Policy Priorities: November 10, 2010, p. 7.)

One issue that’s coming up in considering an extension of benefits is whether legislators will cut other spending in order to pay for the cost of temporarily continuing the unemployment benefit program. We believe that the cost of continuing the unemployment benefits should be subject to the same conditions as extending the Bush tax cuts, and almost no policymakers are advocating requiring an offset to pay for those.

Many believe that Congress is likely to approve one more extension of federal unemployment benefits, possibly as part of the tax cut package. Until the economic recovery gathers more steam, we need Congress to continue unemployment benefits for the long-term unemployed, at least one more time.

Tamarine Cornelius
Jon Peacock

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