Federal unemployment assistance to long-term unemployed workers could end in December unless Congress renews the Emergency Unemployment Compensation program.
(Photo: Matt Rourke, AP)
(USA TODAY) -- About 1.3 million unemployed Americans are set to lose their extended jobless benefits by the end of December if Congress doesn't renew the program, delivering another blow to struggling households hit with recent cuts in food stamps.
Another 850,000 people would run out of unemployment insurance from January through March when their roughly 26 weeks of state benefits end, according to the National Employment Law Project.
"There's a view ... that it would be too heavy a blow both to the economy and to struggling unemployed families to have both food stamp benefits and unemployment benefits all (be cut) within two months of each other," says Bob Greenstein, president of the Center on Budget and Policy Priorities.
On Nov. 1, a temporary increase in food stamp benefits was phased out, affecting more than 47 million Americans.
Some of those affected also receive jobless benefits, NELP says, though it had no specific data.
In 2008, in the middle of the recession, the federal government began providing up to a year or more of "emergency" unemployment benefits to supplement the typical 26 weeks of coverage that states provide.
In January, Congress renewed that program as part of the "fiscal cliff" deal on tax increases and spending cuts, but scaled it back. This year, the unemployed have received 14 to 47 weeks of emergency benefits, depending on their state's jobless rate, NELP figures show.
Those benefits are slated to end Dec. 28, abruptly cutting off payments to the 1.3 million people already receiving them and ensuring that another 850,000 will get no more checks when their 26 weeks of state benefits expire between January and March.
By some measures, the labor market has improved, with unemployment falling to 7.3% last month from a peak of 10% in October 2009. But long-term unemployment has come down only modestly, with 4.1 million Americans, or 36% of all the unemployed, out of work at least six months. They would be the most affected by a phaseout of emergency benefits.
"There's still a crisis of long-term unemployment," says NELP program director Maurice Emsellem.
The portion of the long-term unemployed receiving benefits has fallen to 34% from 45% a year ago, and would drop to 25% if the emergency program is shut down, NELP says.
The move also would reduce economic growth next year by 0.15 percentage points, says Mark Zandi, chief economist of Moody's Analytics. Each dollar the government pays out in benefits yields $1.42 in economic output because the unemployed tend to spend nearly all their payments, he says.
The economy has grown at a relatively weak annual rate of 2.1% in the first three quarters of this year.
Zandi says renewing the extended benefits program is somewhat less likely this year because there's no directly relevant bill, such as the fiscal cliff package, to which the measure could be attached.
Greenstein says it could be added to anticipated budget or Medicare legislation. The White House recently urged Congress to extend the program and last week Democratic members of the House Ways and Means Committee called for a hearing on the issue.
Candace Stewart, 58, says she would have to sell her townhouse if she lost her emergency benefits of about $400 week. Stewart, who was laid off from her job as a quality control inspector last April, has sent out nearly 200 résumés but gotten just two interviews.
"There's just nothing out there to get," she says.