Update on Proposed Extension of UI Benefits, Medicaid Relief and TANF Emergency Fund

Tuesday, July 6, 2010 at 10:49 PM by

An estimated 1.7 million jobless Americans, including about 59,000 in Wisconsin, had lost their unemployment insurance (UI) benefits by July 3rd because of a Senate filibuster of legislation to extend those benefits. According to statistics from the U.S. Department of Labor, the number of directly affected unemployed workers will grow by the end of this week to more than 2.1 million nationally and almost 72,000 in Wisconsin.

In the wake of recent Congressional setbacks — this post explains the somewhat improved prospects for passing a bill next week to restore the extended UI benefits and the diminished chances of extending fiscal relief to the states for Medicaid and TANF program costs.

The Senate has attempted twice in the last two weeks to restore the expiring UI benefits.  On June 30 the Senate fell three votes short of ending the Republican filibuster of HR 4213, which would have restored the UI benefits by 6 months, as well as extending Medicaid fiscal relief and a number of other portions of the Recovery Act.

A July 5 column by economist Paul Krugman, “Punishing the Jobless,” skewers the arguments against renewing the extended UI benefits.  He notes that during past periods of “persistent joblessness” Congress has continued extended UI benefits until the economy rebounds. Krugman contrasted that to the “heartless” cessation of extended UI benefits now, when “American workers face the worst job marker since the Great Depression, with five job seekers for every job opening, with the average spell of unemployment now at 35 weeks.”

The loss of UI benefits is a tremendous economic blow to families. The National Employment Law Project (NELP) has been compiling profiles of affected workers

The version of HR 4213 that was voted on in the Senate on June 30 made several concessions that were requested by Republican Senators. For example, it phased out the Medicaid relief instead of simply extending it six months, and it significantly lowered the net cost of the bill. Nevertheless, none of the GOP Senators voted to end the filibuster of that bill.

The House subsequently took up a new bill (HR 5618) focused just on renewing UI extended benefits for the long-term unemployed. On July 1, the House voted 270-153 to approve that bill, which would continue extended UI benefits through Nov. 30.  A motion later that day to take it up in the Senate got the support of the two Republican Senators from Maine, but it still fell one vote short of the 60 needed to avoid a filibuster. (Although the final vote was 58 to 38, it would have been 59 to 37 if Senator Reid hadn’t changed his vote to no, which enables him to make a motion to reconsider the vote when the Senate reconvenes next week.)

The good news for people who have lost their UI benefits is that a Democratic Senator will soon be appointed to fill Senator Byrd’s seat, and that will provide the 60th vote to extend UI benefits – assuming no other votes change. Thus, it is likely that Congress will pass a UI extension bill soon after it reconvenes on July 12, and that legislation is likely to be retroactive to the beginning of June.

In an indirect way, however, passage of such legislation is worrisome for the majority of states that have been expecting Congress to pass a broader bill that includes state fiscal relief, such as HR 4213. As noted in a June 25 WCCF press release, the pared back version of that House bill would have yielded an estimated $229 million for Medicaid in Wisconsin and potentially as much as $94 million from the TANF Emergency Fund.

Passing the UI benefit renewal as a separate bill further may diminish the chances of enacting federal fiscal relief for the states. It appears increasingly unlikely that a bill extending relief for states will pass, unless there is strong public concern about the upcoming state and local budget cuts and recognition of the potential for such cuts to lead to a double-dip recession.

Categories: Blog, federal issues, Medicaid, Recovery Act, TANF, unemployment benefits | Comments Off on Update on Proposed Extension of UI Benefits, Medicaid Relief and TANF Emergency Fund

Comments are closed.