Significant Unemployment Benefits Victory, but What Comes Next?

Thursday, July 22, 2010 at 11:16 PM by

Thousands of Wisconsin families will sleep a little better after the Senate finally managed to approve a bill last night to extend unemployment insurance (UI) benefits for the long-term unemployed. The House approved the bill this afternoon and sent it to the President for his signature. Although passage of the bill is a huge relief for those families and will pump millions of dollars into communities across the state, the bill is also noteworthy for what it doesn’t include.

The final bill revives a program that provides up to 99 weeks of income support to those who have exhausted their UI benefits, immediately restoring aid to nearly 3 million people who have seen their checks cut off since the program expired June 2. According to statistics from the WI Dept. of Workforce Development, the change aids about 66,000 jobless Wisconsin workers who have lost this vital economic lifeline.

In order to pick up the votes needed to break a filibuster, Senate Democratic leaders had to shelve, at least for now, efforts to extend numerous other Recovery Act measures, including the following provisions for unemployed workers and state fiscal relief:
— The added $25 per week of UI benefits that was initiated by the Recovery Act and was in place until June 2.
— COBRA health insurance subsidies for unemployed workers.
— Extension of the Medicaid fiscal relief for states, which most states have been counting on to help keep their budgets in balance and avoid deep cuts that could hamper the economic recovery.
— Extension of TANF Emergency Contingency Fund, which has helped Wisconsin cope with significantly increased costs for W-2 and the Earned Income Credit.

In light of Wisconsin’s $300 million GPR Medicaid deficit, and the additional $200 million (plus interest) that the State Supreme Curt just told the state it will have to pay back to the state’s medical malpractice fund, Wisconsin sorely needs the Medicaid fiscal relief to be extended. (See the recent Budget Project blog post re those challenges.)

Reviving the extended unemployment benefits had been one part of a much broader bill, HR 4213, which would have extended a number of Recovery Act measures, including Medicaid and TANF fiscal relief to the states. The UI portion was the one piece of that bill with significant costs that weren’t offset. The rest of the bill is paid for primarily by closing a number of tax loopholes – none of which seem to enjoy much public support, and all of which enjoy the support of some powerful interest groups.

Passing the extended UI benefits as a separate bill means that the rest of HR 4213, in its currently pared back form, would be cost neutral. With that in mind, advocates have been hoping that HR 4213, or at a minimum the Medicaid relief portion, could gain the support of a few key Senators who have been basing their opposition to the bill primarily on concerns about increasing the federal deficit, while saying that they would like to provide Medicaid relief for the states.

Now that the costly part of HR 4213 (i.e., the part that wasn’t offset) is no longer before the Senate, we may find out whether lawmakers who have been paying lip service to Medicaid relief actually put a higher priority on maintaining the tax loopholes that would be closed to make the bill cost neutral.

Categories: Blog, federal issues, Medicaid, Recovery Act, unemployment benefits | Comments Off on Significant Unemployment Benefits Victory, but What Comes Next?

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