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Behind the Jobless Benefits Debate #1: What’s the Issue Before Congress?

November 8, 2010 at 4:50 PM

As I mentioned recently, over the next few weeks we will issue a series of posts that look behind the debate over continuing a federal program that provides emergency unemployment benefits and explain what's at stake for jobless workers and the economy. Here's the first in the series:

On November 30, the federally funded program that provides emergency unemployment insurance benefits is scheduled to expire. The program gives additional weeks of benefits to workers whose 26 weeks of regular, state-funded unemployment benefits run out before they can find a job. With the unemployment rate expected to remain above 9 percent through next year, the fundamental question that Congress will debate in the coming weeks is whether to continue an emergency federal program.

Congress has created a temporary program like this in every major recession since the 1950s to address the fact that job opportunities become scarce in a downturn and it can take longer than 26 weeks to find a job, no matter how hard workers are looking.

Congress created the current program, Emergency Unemployment Compensation (EUC), in June 2008. And in the 2009 Recovery Act, Congress also provided full federal funding for the permanent Extended Benefits (EB) program, whose cost is typically shared between the states and the federal government. The full federal funding for EB allowed many states to temporarily expand their programs. But that full federal funding will expire along with the EUC program on November 30 -- even though over two-fifths of the unemployed have been looking for a job for more than 26 weeks.

If that happens, all federal unemployment insurance benefits will end in 40 states, and the number of weeks available in the rest of the states will shrink significantly, as the map below shows. Most of the several hundred thousand workers who exhaust their regular state benefits each month would receive no further help, and many of the 5 million workers now receiving federal emergency benefits would lose their remaining weeks.

2010-11-08ui-f1.jpg

Other posts in the series:

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