More than 1 million to lose unemployment benefits Saturday

Posted Monday, Dec. 30, 2013  comments  Print Reprints
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More than 1 million Americans are bracing for a harrowing, post-Christmas jolt as extended federal unemployment benefits come to a sudden halt this weekend, with potentially significant implications for the recovering U.S. economy. A tense political battle likely looms when Congress reconvenes in a midterm election year.

For families dependent on cash assistance, the end of the federal government’s “emergency unemployment compensation” will mean some difficult belt-tightening as recipients lose their average monthly stipend of $1,166.

Jobless rates could drop, but analysts say the economy may suffer with less money for consumers to spend on everything from clothes to cars. Having let the “emergency” program expire as part of a budget deal, it’s unclear if Congress has the appetite to start it anew.

An estimated 1.3 million people will be cut off when the federally funded unemployment payments end Saturday.

Some 214,000 Californians will lose their payments, a figure expected to rise to more than a half-million by June, the Labor Department said. In the last 12 months, Californians received $4.5 billion in federal jobless benefits, much of it plowed back into the local economy.

More than 127,000 New Yorkers will be cut off this weekend. In Texas, more than 64,000 people will immediately lose out.

At the depth of the recession, laid-off workers could qualify for up to 99 weeks of benefits, including the initial 26 weeks provided by states. The most recent extension allowed a total of up to 73 weeks, depending on the state. In Texas, eligible applicants can receive up to 54 weeks.

Restoring up to 47 extra weeks of benefits through 2014 would cost $19 billion, according to the Congressional Budget office.

House Democrats led by Reps. Sander Levin of Michigan and Chris Van Hollen of Maryland sought to include an extension through March by offsetting the costs with potential farm bill savings. They were rebuffed.

Senate Democrats and some Republicans plan another push in 2014. Sens. Jack Reed, D-R.I., and Dean Heller, R-Nev., have introduced a bill offering a similar three-month extension, and Senate Majority Leader Harry Reid, D-Nev., has promised to bring it up. But as with much in Congress, an extension is no sure thing.

House Speaker John Boehner spoke with Obama about an extension earlier this month. Boehner said his caucus would consider the possibility “as long as it’s paid for and as long as there are other efforts that will help get our economy moving once again.” He said the White House has yet to introduce a plan that meets his standards.

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