Revised March 7, 2003
Looking Back and Looking Forward:
An Assessment of the Temporary Federal Unemployment Benefits
Program and the Needs of the Long-term Unemployed
by Jessica Goldberg and Isaac Shapiro
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Originally signed into law on
March 9, 2002, the Temporary Extended Unemployment Compensation (TEUC) program typically provides up to 13 weeks of federally financed unemployment benefits to unemployed workers who exhaust their regular, state-funded unemployment benefits without finding jobs. (Unemployed workers in states that meet the programs stringent criteria for high unemployment can receive up to 26 weeks of temporary federal benefits.) The program originally expired on December 28, 2002, but Congress restarted it on January 8, 2003. TEUC is now scheduled to start phasing out at the end of May 2003.
This report finds that one year after its inception, TEUC has provided much-needed assistance to a total of 4.7 million jobless workers and has injected $12 billion of well-targeted stimulus into the sluggish economy. However, more than half of all TEUC recipients still had not been able to find jobs when their TEUC benefits expired. An estimated one million of these workers remain unemployed today and are in immediate need of additional assistance. Far more individuals have exhausted their temporary federal benefits and thus have gone without paychecks or unemployment benefits than in the wake of the early 1990s recession.
This fact largely reflects the weaknesses of TEUC compared to the temporary unemployment insurance program Congress created in the early 1990s. Not only does TEUC provide fewer weeks of benefits in all states than the program in the early 1990s, but it also allows fewer states to qualify as high unemployment states, which triggers the provision of additional weeks of benefits.
Overview of TEUC
- Provides federally funded unemployment benefits to jobless workers who run out of regular, state-funded unemployment benefits without finding work.
- Has assisted 4.7 million long-term jobless workers since its creation in March 2002.
- 1 million workers have exhausted TEUC benefits but remain jobless today.
- Program is scheduled to begin expiring at the end of May even though the need for the program as measured by the number of individuals exhausting their regular unemployment benefits is still rising.
This report takes a look at the likelihood that TEUC will need to be extended beyond its scheduled expiration. It finds that the need for the program as measured by the number of workers running out of regular state unemployment insurance benefits continued to grow through January (the last month for which actual data are available). It predicts that this trend is not about to reverse itself, based on estimates that the overall number of regular program exhaustees from February through the end of May will be slightly higher than during the same months in 2002. In contrast to the scheduled premature termination of the TEUC program, earlier federal unemployment insurance programs remained in place until the number of workers exhausting regular state-funded benefits had declined by a considerable amount and for an extended period.
Thus, the report recommends that Congress (and the Administration) be prepared to extend the TEUC program when its expiration approaches in May, and to consider strengthening the program as well. In addition, given TEUCs weakness relative to previous temporary federal programs, the report recommends that Congress act now to provide additional weeks of TEUC benefits to the one million TEUC exhaustees.
View full report.