New Year’s Deadline Looms for Federal Unemployment Insurance; President Presses for Renewal
Posted by: Mitchell Hirsch on Dec 28, 2012
UPDATED: 11:00 pm Jan. 1: BREAKING NEWS: The Senate-passed year-end tax compromise including renewal of federal Emergency Unemployment Compensation (EUC) for 2013, passed the House of Representatives late on New Year's and is to be signed shortly by the President. Details to follow ---
--- 3am,, Jan. 1:
The U.S. Senate has passed a tax compromise bill that renews federal unemployment insurance through 2013, without benefit cuts. The House, which has a rare New Year's Day session starting at Noon, would need to pass the bill to send it to the President for his signature.
--- Friday, Dec. 28:
President Obama called Congressional leaders to a meeting at the White House late Friday as the year-end expiration of federal jobless aid, and a host of harsh austerity measures and tax changes fast approach. Following that meeting, talks focused on the Senate continued through the weekend among Democratic and Republican leaders and the White House, with reports indicating a renewal of unemployment insurance may well be part of a final year-end agreement. As of this morning, that agreement had not yet been reached. This afternoon, however, Politico is reporting that a deal is emerging and on some key elements that are reportedly in the agreement, including a renewal of unemployment insurance.
The Washington Post reported the summit meeting is:
“… a last-ditch effort to protect taxpayers, unemployed workers and the fragile U.S. recovery from severe austerity measures set to hit in just four days.”
“Also Thursday, House Speaker John A. Boehner (R-Ohio) announced that he would call the House back into session this weekend. And in perhaps the most significant development, Senate Minority Leader Mitch McConnell (R-Ky.) for the first time was engaged directly in talks with the White House. He signaled an interest in cutting a deal.”
Under current law, the federally-funded unemployment insurance program has a hard end date of January 2, 2013. Precious little time remains for Congress to act to renew the program, something the President and Congressional Democrats have been pressing to include in a year-end legislative package.
More than two million unemployed job-seekers currently receiving federal Emergency Unemployment Compensation (EUC) benefits will see those benefits stop after receiving payment for the week ending Saturday, December 29. Nearly a million more would lose access to those benefits during the first three months of 2013. Together, more than five million unemployed workers would be unable to receive any federal jobless aid beyond their weeks of regular state benefits next year if Congress fails to renew the federal EUC program.
“The 11th hour has arrived. Millions of unemployed workers and their families are hoping that Congress will come through for them this holiday season,” Christine Owens, executive director of the National Employment Law Project said in a statement yesterday. “Other consequences of going over the fiscal cliff won’t be felt for some time, but losing Emergency Unemployment Compensation will deliver an immediate and severe blow to people who are already down. That aid is crucial—it helps out-of-work families cover their bills and pay for basics like food and clothing, while folks continue to search for work. A lapse in the program would be devastating. In good conscience, we cannot allow that to happen,” said Owens.
With the national unemployment rate of 7.7 percent, still more than two points higher than when the extension of EUC was enacted in mid-2008, and with long-term unemployment a persistent crisis, it is far too soon to remove or further reduce this critical lifeline. As the graph below shows, both the 40 percent of jobless workers unemployed six months or more, and the 40 week average duration of unemployment remain near record levels -- and much higher than ever previously reached.
President Obama, supported by Democratic leaders in the Senate and House, had included a year-long renewal of federal unemployment insurance in each of a series of proposals offered in talks with Republican House Speaker John Boehner aimed at reaching an agreement on a package of year-end measures. Those talks were derailed when Speaker Boehner went his own way and attempted to move his own narrow ‘Plan B’ – which did not include a renewal of unemployment insurance – in the House. But that effort failed when extremists among House Republicans refused to back it because it would have increased taxes on incomes over one million dollars a year. ‘Plan B’ was pulled by the Speaker before a vote on the House floor.
The effort to avert the so-called ‘fiscal cliff’ of austerity measures, severe budget cuts and tax increases – and to renew federal jobless aid for 2013 – now centers on the White House gathering with Congressional leaders. A compromise plan that would preserve unemployment insurance, and protect middle-class and low-income working families from income tax hikes, may emerge at least as a stopgap measure.
But as time ticks away toward the New Year’s deadline, the outcome is uncertain. If a reauthorization of the federal EUC program is not enacted by January 2, the program expires and benefits would end abruptly for more than two million jobless Americans looking for work. In that event, Congress could take up a renewal even after the program lapses, and restore benefit payments retroactively.
That has happened before, in fact – four times over the course of 2010, when Republican filibusters caused the benefits to lapse.
Aware that the program could lapse and then be restored early in 2013, states such as Nevada are urging EUC claimants to continue to file timely benefit claims, and meet normal job search and other requirements, after the expiration of EUC benefits, should that occur. If they continue to file, claimants would be able to receive retroactive benefit payments more promptly, if the program lapses and is subsequently restored.
Meanwhile, tens of thousands of jobless workers, their families, friends and supporters continue to press Congress to act. More than 128,000 email messages have been sent to Congressional leaders through the UnemployedWorkers.org online action page. Thousands of phone calls are hitting Congressional offices. You can call your Senators, your Representative and Congressional leaders toll-free at 1-888-245-0215. Find your Senators here, and your Representative here. Tell them: “Don’t push jobless Americans off the cliff! Renew Unemployment Insurance for 2013 Now!”
See all blog entries »