Unemployment Insurance for Millions Not Yet Renewed as Jobs Bill is Blocked in the Senate
Posted by: Mitchell Hirsch on Oct 12, 2011
Despite a majority of Senators voting to take up debate of the American Jobs Act, a minority succeeded Tuesday in blocking the measure from even being considered. The bill includes several key job-creation and tax-relief provisions designed to boost a stalling economy, and programs to aid long-term unemployed workers, including a ban on discrimination against jobless workers in the job market, as well as the essential renewal of federal unemployment insurance programs.
Unless Congress reauthorizes the current federal benefit programs before the December 31st deadline, millions of workers and their families will be left without their primary means of support to buy food, pay the rent or mortgage, and cover their other most basic necessities.
Lawmakers are reportedly seeking to act on several key components of the jobs bill separately in coming weeks.
An estimated 1.8 million jobless workers will be cut-off from federal unemployment insurance in January alone if Congress fails to renew the benefit programs, according to a new report issued by the National Employment Law Project. This includes nearly 1.4 million unemployed workers already receiving federal unemployment insurance, among them nearly 650,000 who would face an immediate “hard” cut-off of Extended Benefits, as well as more than 430,000 unemployed workers laid off as recently as July who will exhaust their state unemployment benefits in January.
And those numbers may well go much higher, as unemployment remains persistently high and, in many states, rising. In July and August, a total of more than 1.5 million first payments of regular state unemployment insurance were reported.
Over the course of 2012, the Administration projects that at least six million workers will not have access to federal unemployment insurance if the program is not reauthorized. Ms. Dawn Deane, a 49-year-old mother of two from Philadelphia, who was laid off in late June of this year, is one of those workers in danger of losing access to federal benefits. Despite twenty years of professional human resource experience, Deane says her diligent search for new work has thus far been disappointing.
“The unemployment insurance is helping me manage and maintain my mortgage, utilities, and car payments—helping us just barely stay above water,” Deane says in the NELP report. “Without it, I’d just have nothing while I look for new work—not even heat, electricity, or a phone. And if it got cut off, I would fall behind on my mortgage, probably face foreclosure, have my car repossessed, and end up applying for welfare.”
Last week, Deane testified at a House subcommittee hearing, urging lawmakers to renew the federal unemployment insurance programs through next year.
NELP’s report, “Hanging on by a Thread,” warns that a lapse or cut in the federal unemployment insurance programs would deal devastating blows to jobless workers, struggling businesses, and the fragile U.S. economy.
“For millions of out-of-work Americans hanging on by a thread, unemployment insurance is the only thing preventing a free-fall into destitution and despair,” said Christine Owens, executive director of the National Employment Law Project. “For struggling businesses and the halting economy, unemployment insurance is what’s preserving consumer spending at a moment we need it most. Withdrawing this crucial stimulus would likely tip the nation back into recession.”
Since the data were first reported in 1948, the nation has never experienced the record stretch of high unemployment and long-term joblessness that now plagues the economy. Congress has never cut back on federally-funded unemployment insurance when unemployment was anywhere near this high for this long. The highest unemployment rate when federal benefits were cut by Congress was in 1985, at 7.2 percent. Today, the unemployment rate stands at 9.1 percent.
Currently, the unemployment rate has been above 8.5 percent for more than 31 months, and for nearly two years, over 40 percent of the unemployed have been out of work for more than six months.
The report highlights other factors that favor prompt passage of the federal extension of unemployment insurance through 2012:
- Due largely to the federal extension, in 2010, unemployment insurance kept 3.2 million people (including nearly one million children) from falling into poverty. Were it not for unemployment insurance, the number of people falling into poverty would have more than doubled in 2010.
- The federal unemployment insurance programs have saved or created millions of jobs since first enacted in July 2008, including more than 1.1 million jobs in the fourth quarter of 2009 alone.
- Recent research and two new state surveys strongly indicate that workers who are receiving unemployment insurance are more likely, not less, to stay in the labor market and actively seek work despite dim prospects for reemployment.
“With our economy so fragile, long-term unemployment so high, and the job market so weak, the stakes could not be greater or the consequences of inaction more severe,” NELP’s Owens said.
“We are mired in a national crisis of long-term unemployment. Not since the Great Depression have so many people been out of work for so long. This is not the time to cut back on federal unemployment insurance.”
