3 Million Jobless Face Loss of Benefits in Early 2013 If Congress Fails to Renew Federal EUC Program
Posted by: Mitchell Hirsch on Nov 13, 2012
More than two million unemployed workers receiving federal unemployment benefits will be abruptly cut off in the week between Christmas and New Year's, unless Congress acts before then to reauthorize the Emergency Unemployment Compensation (EUC) program for 2013. Nearly one million more who run out of state benefits would be without access to federal benefits in the first quarter of 2013 if Congress fails to renew the EUC program.
A new report, Don't Push Jobless Americans Off the Cliff, from the National Employment Law Project (NELP), warns that more than 5 million unemployed job-seekers won't have any federal unemployment benefits next year if Congress fails to act. The federal EUC program, already pared back significantly in a bi-partisan compromise earlier this year, is set to expire in a hard cut-off after the benefit week ending December 29.
NELP is calling upon Congress to make this issue a priority during the lame-duck session of the 112th Congress. Not only should Congress reauthorize the EUC program in its current form for the next year, it should also make a modest but high-impact investment in reemployment services. Specifically, NELP proposes a new federal commitment of $1.6 billion to benefit 2.8 million workers served by the under-resourced state and local programs that connect unemployed workers to available jobs. (National Employment Law Project, Getting Real: Time to Re-Invest in the Public Employment Service, October 2012.)
Improved, high-quality reemployment services, advocates say, should be targetted particularly to long-term unemployed workers, including those who have exhausted unemployment insurance or may be more likely to exhaust benefits before being able to secure new jobs.
The federal EUC program currently in place provides additional weeks of unemployment insurance benefits to qualified claimants whose regular state UI benefits run out. Those additional weeks are offered in EUC Tiers, with all states offering up to 14 weeks in Tier 1. Beyond that, states may qualify for the additional Tiers 2, 3 and 4 depending on each state's 3-month average unemployment rate. States with a rate of 6 percent or higher offer up to 14 weeks in Tier 2 to those workers who exhaust Tier 1 benefits. States with a rate of at least 7 percent qualify for up to 9 weeks in Tier 3. And states with rates of 9 percent or higher offer up to 10 weeks of benefits in Tier 4.
As the NELP report details, the current EUC program has already been downsized substantially, even as long-term unemployment remains at near-record levels.
Between November 2011 and February 2012, Congress extensively debated the amount of federal unemployment insurance to provide to this nation’s long-term unemployed. Those protracted negotiations resulted in a bipartisan compromise that kept the EUC program up and running, but scaled it back significantly, tailoring it more narrowly to the rates of unemployment in the individual states. These federal benefits, which now range from 14 weeks to 47 weeks depending on the unemployment rate in the state, supplement the 26 weeks of state unemployment insurance provided by most states.
- Only 7 states qualify for the maximum 47 weeks of EUC available to states with over 9 percent unemployment. Before the program was scaled back in February, 17 states qualified for the maximum 73 weeks of EUC that were available based on an unemployment rate of 8.5 percent or higher.
- In 44 states, federal EUC benefits are now limited to 37 weeks or less. At the beginning of the year, 29 states qualified for 60 weeks or more.
- Today, unemployed workers in 10 states receive just 14 weeks of EUC (the minimum authorized by the federal law). In February 2012, all states received at least 34 weeks of federally funded benefits.
- Not surprisingly, the February 2012 restructuring of the EUC program (and the virtual elimination of the Extended Benefits program) also contributed to a dramatic reduction in the number of workers receiving federally funded unemployment benefits. Since February, roughly 1.2 million fewer workers accessed federal unemployment benefits, even though the national unemployment rate has dropped less than half a percentage point and the number of unemployed workers has decreased by only 550,000.
- If the EUC program is not reauthorized, the share of jobless workers receiving unemployment insurance in the United States will likely decrease to approximately one in four.
With jobless workers' average length of unemployment now at 40.2 weeks, longer than a year ago and still near record length, failing to reauthorize the federal EUC program would be cruel to millions of workers struggling to make ends meet while they urgently seek new jobs.
Richard Crowe of Wintersville, Ohio, worked for the same steel company for 34 years, before being laid off in May of 2012 when his plant was sold to a scrapping firm. “I’ve worked my whole adult life, helped support my family and put my son through college. Unemployment insurance, and especially the federal benefits extension I’ve been receiving, help us pay our most critical bills. If we’re cut off at the end of December, we won’t be able to maintain our fuel, heat and utilities, not to mention the payments on the college loans for our son that we still owe. And if we can’t pay that, we could lose our home.”
“I’m engaged in an active job search literally seven days a week, looking and applying for jobs both in my area and out of the area as well. It is very tough, though, especially I think for older workers. It sometimes seems like all my years of experience just don’t matter.”
“Renewing federal unemployment insurance should be a no-brainer for Congress. It would be downright cruel for them to allow so many folks like me to just be cut off while we’re still looking for work.”
For Richard and his family, and for millions like him, Congress needs to do the right thing and renew the federal EUC program, without delay and without further cuts, for 2013.
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