House Leadership Bill Slashes Unemployment Insurance

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Proposal Reduces Federal Jobless Benefits by More than Half for Unemployed Workers in the Highest Unemployment States

Renew Unemployment Insurance NowWith federally-funded unemployment insurance programs set to expire on December 31st, the leadership of the House of Representatives has proposed to slash the federal unemployment insurance programs and do substantial harm to the basic state programs, a new analysis from the National Employment Law Project finds. The proposals are part of bill H.R. 3630 sponsored by the Chairman of the Ways and Means Committee, Representative Dave Camp (R-MI). A vote is expected as early as Tuesday.

“Rather than forge consensus and maintain the lifeline that serves more than six-and-a-half million U.S. workers and their families, the Camp bill cuts federal unemployment insurance by more than half in 2012, eliminating 40 weeks of benefits,” said Christine Owens, Executive Director of the National Employment Law Project.  “Perversely, the most severe and immediate cuts are directed at states with the highest unemployment.  Cutting benefits so drastically for the hardest-hit workers and communities is a draconian and cynical measure,” she said.

Unemployed workers in the following states would lose access to 40 weeks of unemployment insurance under H.R. 3630:  Alabama, California, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Kentucky, Michigan, Missouri, Nevada, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee,  Texas, and Washington. The current range of 34 to 73 weeks of available federally-funded unemployment insurance, depending on the state, would be dramatically reduced to 20 to 33 weeks, if the bill were enacted.

NELP estimates that the House leadership’s proposal would result in as much as $22 billion in lost economic growth to the nation’s economy, which also translates into a loss of at least 140,000 jobs next year.

Key Features of H.R. 3630

  • Immediately Slashes Federal Jobless Benefits and Undermines Economic Growth, Penalizing the  Highest Unemployment States
  • Usurps the Established Authority of the States to Determine Eligibility for Unemployment Benefits, While Penalizing Millions of Deserving Workers With a New High School Equivalency Mandate to Qualify for State Benefits
  • Misguided Drug Testing Policy Further Penalizes Honest Workers and Pointlessly Burdens State Agencies 
  • Opens the Door to “Means Testing” of UI Benefits By Denying Benefits to Workers Based on Their Income
  • Further Insults Workers by Charging them $5 Each for the Costs of their Reemployment Services
  • Would Authorize Waivers of Federal Law that Now Protect Against Abuse of the Program, Such as New Workfare Type Programs
  • Eliminates the “Non-Reduction Rule,” Providing States with the Leeway to Slash UI Benefits Next Year

The reduced level of income support under H.R. 3630 would, in turn, further strain state and local budgets due to the loss of payroll taxes, sales taxes and other revenue generated by spending on local goods and services, the analysis states. At a time when more than a third of the nation’s unemployed have been jobless for a year or more, eliminating over half of the unemployment benefits available for the long-term unemployed will also drive these workers and their families to greater reliance on dwindling state, local  and community resources like food pantries and shelters.

“Congress is facing what should be an easy choice,” said Owens. “Before Members leave for the holidays and return to their homes full of food and presents, they need to decide whether they support the unemployed and local communities with an unemployment safety net that is commensurate with the need out there. Or, will they slash and burn, cutting benefits from precisely the workers and communities who have suffered the most.”

“This should not be a hard choice – maintaining the current federal unemployment insurance programs is the right thing to do for unemployed workers and their families, for America, and for our economy,” said Owens.

Representatives Sander Levin (D-Mich.) and Lloyd Doggett (D-Tex.) and Senator Jack Reed (D-R.I.) have introduced legislation to do just that (H.R. 3346 and S.1804). “Both Houses of Congress should pass them without delay, without change, and in their entirety,” Owens said.

Call your Members of Congress toll-free now at 888-245-3381 or use this easy click-to-call page to tell Congress to vote 'No' on HR 3630.  And send a message to Congressional leaders and your Representative and Senators to oppose HR 3630's cuts to unemployment insurance, and instead, to support a full renewal of the federal unemployment insurance program through 2012.

 

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