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Three Reasons Congress Should Restart Emergency Jobless Benefits — Now

Update, April 8: We updated the chart to reflect the March jobs report.

President Obama tonight is expected to call again on Congress to restart emergency jobless benefits for long-term unemployed workers.  Here are three reasons why lawmakers need to step up their bipartisan discussions on the issue and reach agreement.

  • Every week of delay means more jobless workers won’t get needed help.  An estimated 1.3 million jobless workers lost Emergency Unemployment Compensation (EUC) benefits right after Christmas when the program expired.  If Congress doesn’t restart it, the number of affected workers will continue to climb each week, reaching 4.9 million by the end of the year.  (Our report, based on Labor Department data, gives the state-by-state specifics.)Families rely on unemployment benefits to meet basic needs like food, health care, and housing while they look for work.  With EUC’s expiration, only regular state unemployment benefits — which last 26 weeks in most states — are available to qualifying workers who lose their jobs through no fault of their own.
  • The labor market hasn’t improved enough to end the program.  EUC, like the federal emergency programs enacted in every major recession since the late 1950s, is a temporary program that provides additional weeks of benefits to qualifying jobless workers when jobs are hard to find.  Labor market conditions are much better than in the depths of the Great Recession in 2008-09, but they remain much worse than when policymakers let any of those programs expire.In particular, long-term unemployment is nearly twice as high as when any previous program expired (see chart).

  • Unemployment insurance is one of the most cost-effective ways to help a weak economy.  Jobless benefits go to people who need the assistance to make ends meet, they spend the funds quickly, and the spending ripples through the economy.  In fact, without the consumer spending that those benefits generated, the Great Recession would have been even deeper and the recovery even slower.And while the recent Murray-Ryan budget deal provides a modest stimulative boost to the economy, the economic drag caused by lawmakers’ failure to include an extension of federal emergency jobless benefits in the deal will likely negate that stimulus.It’s also important to remember that because EUC ends when the economy improves, it has only a minor effect on long-term budget deficits and debt.