Congress to unemployed: have a rotten, little Christmas

In session
December 2002

Congress to unemployed: have a rotten, little Christmas
The lame duck 107th Congress adjourned on November 22 without extending unemployment benefits that would have assisted 1.2 million jobless workers. A bill that would have funded a 13-week extention of the federal temporary unemployment benefits program had already passed in the Senate, but House Democrats could not got the proposal past the Republican-controlled House of Representatives.

Now thousands of workers will exhaust their unemployment benefits between December 28 and March 29. That additional help was especially necessary now, according to the Center on Budget and Policy Priorities, because a tepid economic recovery has not led to meaningful job creation while unemployment rates have been on the rise.

According to the Bureau of Labor Statistics, the percentage of the unemployed without work for 27 weeks or more rose to 20.3 percent in October, the largest proportion since October 1994. It stood at 19.5 percent in September.

Unemployment in October was 5.7 percent, down from a peak of 6.0 percent seen earlier in the year, and has remained in a fairly tight range this year. While that is sharply higher than the 3.9 percent unemployment seen at the peak of the economic boom that ended in 2001, it's still a level economists just five years ago would have considered full employment—the point at which they believed inflation would start rising sharply.

The unemployment extention would not have helped the one million jobless workers who have already exhausted all their state unemployment benefits.

The House failure to act means:

* At the end of the year an estimated 830,000 jobless workers who will be receiving these benefits will have them cut off immediately.

* Starting on December 29, an additional 95,000 jobless workers per week will run out of state unemployment benefits without finding a job and get no temporary federal unemployment assistance.

* By the end of March, a total of 2.1 million jobless workers will not receive temporary benefits who would receive them under the Senate bill. (See Table 1 for state-by-state data.)

The TEUC program will only have been in effect for less than 10 months. By contrast, in the wake of the recession of the early 1990s a temporary federal benefits program was in place for 30 months, or three times as long. The TEUC program will expire even though the number of jobs in the economy has actually decreased in the past two months and even though by a number of indicators the current economic slump has hit workers as hard as the recession of a decade ago.

According to CBPP, letting the TEUC program expire was precisely the wrong step to take when there is widespread agreement about the need for more, not less, economic stimulus.

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