House moves to extend unemployment benefits

[samanthajane13]

By JIM ABRAMS, Associated Press Writer Jim Abrams, Associated Press Writer – Mon Sep 21, 6:31 am ET

WASHINGTON – Despite predictions the Great Recession is running out of steam, the House is taking up emergency legislation this week to help the millions of Americans who see no immediate end to their economic miseries.

A bill offered by Rep. Jim McDermott, D-Wash., and expected to pass easily would provide 13 weeks of extended unemployment benefits for more than 300,000 jobless people who live in states with unemployment rates of at least 8.5 percent and who are scheduled to run out of benefits by the end of September.

The 13-week extension would supplement the 26 weeks of benefits most states offer and the federally funded extensions of up to 53 weeks that Congress approved in legislation last year and in the stimulus bill enacted last February.

People from North Carolina to California "have been calling my office to tell me they still cannot find work a year or more after becoming unemployed, and they need some additional help to keep their heads above water," McDermott said.

Critics of unemployment insurance argue that it can be a disincentive to looking for work, and that extending benefits at a time the economy is showing signs of recovery could be counterproductive.

But this recession has been particularly pernicious to the job market, others say.

Some 5 million people, about one-third of those on the unemployment list, have been without a job for six months or more, a record since data started being recorded in 1948, according to the research and advocacy group National Employment Law Project.

"It smashes any other figure we have ever seen. It is an unthinkable number," said Andrew Stettner, NELP's deputy director. He said there are currently about six jobless people for every job opening, so it's unlikely people are purposefully living off unemployment insurance while waiting for something better to come along.

The current state unemployment check is about $300 a month, supplemented by $25 included in the stimulus act.

That doesn't go very far when a loaf of bread can cost $2.79 and a gallon of milk $2.72, Senate Finance Committee Chairman Max Baucus, D-Mont., said at a hearing last week on the unemployment insurance issue.

"We need to keep our unemployed neighbors from falling into poverty. We need to figure out how best to make our safety net work," Baucus said.

The jobless rate currently stands at 9.7 percent and is likely to hover above 10 percent for much of 2010. Gary Burtless, a senior fellow at the Brookings Institution, said at the Finance Committee hearing that, according to Labor Department figures, 51 percent of unemployment insurance claimants exhausted their regular benefits in July, the highest rate ever.

"It is likely the exhaustion rate will continue to increase in coming months" as the unemployment rate continues to rise, he said.

Stettner predicted that Congress will likely have to continue extending jobless benefits through 2011.

McDermott in July introduced a more ambitious bill that would have extended through 2010 the compensation programs included in the stimulus act. Those benefits are now scheduled to expire at the end of this year.

But with a price tag of up to $70 billion, that bill would have been far more difficult to pass. McDermott instead decided to offer the scaled-down 13-week extension to meet the urgent needs of those seeing their benefits disappear this year.

McDermott said his bill would not add to the deficit because it would extend for a year a federal unemployment tax of $14 per employee per year that employers have been paying for more than 30 years. It would also require better reporting on newly hired employees to reduce unemployment insurance overpayments.

Three-fourths of the 400,000 workers projected to exhaust their benefits this month live in high unemployment states that would qualify for the additional 13 weeks of benefits under his bill, McDermott said.

They include Alabama, Arizona, California, District of Columbia, Florida, Georgia, Illinois, Indiana, Kentucky, Massachusetts, Michigan, Mississippi, Missouri, Nevada, New Jersey, North Carolina, New York, Ohio, Oregon, Pennsylvania, Puerto Rico, South Carolina, Tennessee, Washington, Wisconsin and West Virginia.

Other states could qualify for more benefits if their unemployment rates are approaching the 8.5 percent threshold.


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[samanthajane13]

House votes to extend jobless benefits
By JIM ABRAMS, Associated Press Writer Jim Abrams, Associated Press Writer – 2 hrs 51 mins ago

WASHINGTON – Jobless workers in imminent danger of losing their unemployment benefits would get a 13-week reprieve under legislation approved by the House on Tuesday.

The House bill, which applies to 27 states plus the District of Columbia and Puerto Rico with unemployment rates of 8.5 percent or higher, would add to the already-record levels of benefits that have been available to the jobless as the country struggles to recover from its prolonged economic malaise.

It would not, however, give any extra benefits to the longtime unemployed in states that have lower levels of joblessness, including Nebraska, North Dakota and Utah.

The bill passed easily, 331-83, although the two parties cast the measure in different lights. Democrats said the relief was still needed despite positive signs that their policies were reviving the economy. Republicans said the high jobless rate proved that the Obama administration's economic strategies weren't working.

The bill, if enacted, would offer a reprieve to more than 300,000 jobless workers who are slated to run out of unemployment compensation at the end of September and the more than 1 million expected to exhaust their benefits by the end of the year.

"Across America there are people who are hanging on by a thin economic lifeline called unemployment insurance," said the bill's sponsor, Rep. Jim McDermott, D-Wash. "Without passage of this bill, that thread will break for over 1 million workers before the end of this year, plunging them and their families into an economic abyss and threatening to reverse the positive signs we are beginning to see in the economy."

Republican Rep. Geoff Davis of Kentucky, a state that would qualify for more benefits under the bill, said the further extension of benefits was "yet another sign of the failure of this administration's stimulus plan to create jobs."

The House action reflects the continuing depressed state of the job market despite some signs that the economy is recovering. The unemployment rate now is 9.7 percent and economists see it topping 10 percent in 2010.

Some 5 million people, about one-third of those unemployed, have been without a job for six months, the highest number since data was first collected in 1948. There are nearly six unemployed for every available job.

"The job-finding situation is still dire," said Andrew Stettner, deputy director of the research and advocacy group National Employment Law Project. "Until we figure out how to create jobs there is so much collateral damage" from neglecting to help the jobless, including people losing their homes and facing food insecurity and mental depression, he said.

States that are closing in on the threshold of 8.5 percent could be eligible later for more weeks of benefits this year, McDermott said.

The rationale is that it is more difficult and time consuming for people in those states to find new jobs. Similar legislation is pending in the Senate.

McDermott said the 13-week extension would apply to about three-quarters of the 400,000 people expected to exhaust their unemployment benefits this month.

The congressman says his bill would cost $1.4 billion but does not add to the deficit because it raises money from extension for a year of a federal unemployment tax, costing about $14 an employee per year. That tax, which brings in about $7.2 billion in a year, has been on the books for 30 years, with the money going into the federal unemployment insurance trust fund. The bill would also require better reporting on new employees to reduce unemployment insurance overpayments.

Most states offer 26 weeks of unemployment benefits, with the average payment about $300 a week. As part of the stimulus act passed last February, the federal government kicked in another $25.

The stimulus act included several federal programs to help cash-strapped states, thus increasing the maximum level of benefits for the hardest-hit states to 79 weeks.

Because the recession officially began in December 2007, people getting the full 79 weeks could be running out of benefits and would be entitled to the 13-week extension.

McDermott last summer introduced broader legislation that would have extended the benefits proffered in the stimulus bill, now set to expire at the end of this year, for another year. But he decided to narrow the goals of the legislation because the bigger and far more expensive bill would have been more difficult to get through Congress.

The bill is H.R. 3548.

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On the Net:

Congress: http://thomas.loc.gov


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