May 23, 2003

Those without Paychecks or Unemployment Checks
in Especially Difficult Straits
by  Isaac Shapiro and Jessica Goldberg

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A bill (H.R. 2185) that extends the Temporary Emergency Unemployment Compensation (TEUC) program through the end of the year was approved last night by the House, passed today by the Senate, and expected to be signed into law by the President.  This extension is needed, but so is an essential improvement in the program that was not included.  There is a large category of unemployed individuals who have already used up all their unemployment benefits and are still without a job.  These “exhaustees” are especially likely to have fallen into poverty and into debt, and would have been helped by alternative plans[1] offered and defeated in both the House and Senate.  The extension approved by Congress fails to provide them with additional assistance, even though a main reason so many workers have exhausted all their benefits is that the number of weeks of benefits provided under the current TEUC program is less than the number provided under earlier programs.

The workers who have already exhausted both their state and federal unemployment benefits and are still unemployed are among the hardest hit by the recession.  These workers, many of whom have been unemployed for nine months or longer, have neither paychecks nor unemployment insurance benefits to spend upon basic living expenses.

End Notes:

[1] In the House, a “motion to recommit” that would have sent the unemployment benefits extension bill back to Committee to add extra weeks of benefits for exhaustees failed.  In the Senate, a unanimous consent request from Senator Kennedy for a bill that would have provided additional weeks of benefits to exhaustees was denied. 

[2] Indeed, because the unemployed have been having greater difficulty finding work than CBO assumed when developing its methodology, the number of workers who will have exhausted all available federal benefits and will still be unemployed as of the end of May might be as high as 1.4 million.

[3] After adjusting for the increase in the number of workers covered by the unemployment insurance system between the early 1990s and the present, 42 percent more workers exhausted benefits since the start of the TEUC program than in a comparable period during the early 1990s.

[4] Jonathan Gruber, “The Consumption Smoothing Benefits of Unemployment Insurance,” The American Economic Review, March 1997, Volume 87, Issue 1.

[5] Survey by Peter D. Hart Research Associates commissioned by the National Employment Law Project, “Unemployed in America,” conducted April 17-28, 2003.

[6] Family Incomes of Unemployment Insurance Recipients and the Implication for Extending Benefits, Congressional Budget Office, February 1990.

[7] Walter Corson and Walter Nicholson, The Federal Supplemental Benefits Program:  An Appraisal of Emergency Extended Unemployment Insurance Benefits, Upjohn Institute, 1982.