Millions Lose Unemployment Benefits
CBS NEWS — On Saturday (Dec. 28), approximately 1.3 million Americans who have been unemployed for weeks, months or years are waking up to a grim reality: a steady supply of cash assistance through the Emergency Unemployment Compensation (EUC) program has been cut off, and as of right now, no help is on the horizon.
The federal program, which was expanded in 2008 to provide extra income to the long-term unemployed who have exhausted their 26 weeks of state benefits, lapses Saturday because Congress failed to extend the federal program into 2014. For much of the recession, the government not only offered extended benefits beyond those 26 weeks, but also introduced the EUC program to offer up to 99 weeks of assistance in many states.
In the first six months of 2014, 1.9 million additional Americans will use up their state-funded benefits and find themselves without a federal safety net waiting if the program is not renewed. That number will jump to 3.6 million people. According to a report from the White House Council of Economic Advisors and the Labor Department, in October the average length of unemployment was 36.1 weeks – two and a half months longer than state benefits will last with no extension. The long-term unemployment rate is 2.6 percent, roughly one-third of the overall employment rate of 7.3 percent.
“In no prior case has Congress allowed special extended benefits to expire when the unemployment rate was as high as it is today,” the report says.
It’s also been quite a while since anyone was able to receive 99 weeks of benefits, which average about $300 per week. Over the past two years, the average maximum weeks of available benefits has dropped from 85 to 54, or 36 percent, according to Congressional Research Service data.
So what’s the hold up? Democrats have been clamoring for an extension of the program, which would run the government more than $25 billion over the course of a year, according to a Congressional Budget Office estimate. They cite research from the Congressional Budget Office that says extending EUC would raise the GDP by 0.2 percent in 2014 and add about 200,000 jobs by the fourth quarter, largely because benefit recipients would be able to spend more money on consumer goods and services. That would spur demand and allow businesses to boost production and hire more workers.
But Republicans have said any extension of the benefits should be paid for so that they don’t add to the federal deficit. House Speaker John Boehner, R-Ohio, has put the impetus on President Obama to come up with such a plan.