CHN: Unemployment Insurance Extension Turned Back Again in the Senate

February 10, 2014

On February 6, the Senate failed twice on procedural votes to garner the necessary support of 60 Senators to limit debate and move to passage of S. 1845, The Emergency Compensation Extension Act.  All Democrats and Independents and 4 Republicans [Ayotte (NH), Collins (ME), Murkowski (AK) and Heller (NV)] supported an amendment to S. 1845 that called for a 3-month retroactive extension of emergency unemployment compensation (EUC), falling just one vote short of passage. (The actual vote was 58-40, because Majority Leader Reid (D-NV), a strong supporter of restoring unemployment insurance, changed his vote from yes to no in order to be able to move reconsideration of the bill at a later time.) The $6.4 billion cost of the extension was fully paid for by allowing corporations to reduce tax-deductible pension fund contributions.   Democrats then tried to pass the original version of S. 1845, an 11-month extension through November 30 costing $25 billion and paid for by extending the sequestration cuts that apply to Medicare and certain other mandatory programs for an additional year.  Republicans had demanded that the bill be paid for, but raised the bar by also demanding an open amendment process seen as an opening for unlimited controversial amendments.  Only one Republican, Heller (NV), joined Democrats and Independents in support of the 11-month extension. The votes followed two earlier attempts in January to extend EUC.  (See more details in the January 24 Human Needs Report.)

Failure to extend the program means that each week approximately 72,000 workers are added to the 1.3 million that were left without this safety net program when their EUC expired on December 28.  Contrary to some myths, these are not individuals who refuse to look for work and are enjoying an easy, laid-back time. In order to receive EUC they must be actively looking for work, a daunting task when there are three job seekers for every available job.

In January, the national unemployment rate dropped to 6.6 percent from 6.7 percent in December, but jobs grew by a less than expected 113,000. Congress, by failing to renew unemployment benefits, is making things worse.  According to the Congressional Budget Office, restoring EUC throughout 2014 will increase employment by 200,000 jobs.  Of particular concern is the number of long-term unemployed – 35.8 percent of the unemployed have been out of work for six months or longer, and nearly one-fourth of them have been out of work for at least one year. Investing in these workers who desperately need assistance to meet basic needs like housing and food is a strong anti-poverty strategy. In 2012, unemployment insurance kept 1.7 million people out of poverty, including 446,000 children, according to a report from the National Employment Law Project.

EUC has long been considered an emergency program that does not have to be paid for by other spending reductions or revenue increases. Five times under President George W. Bush, when the unemployment rate was above 6 percent, unemployment insurance was extended without paying for it and with the support of the majority of Republicans. Now Republicans are demanding offsetting cuts.

Democrats in the Senate say they are committed to continue to find a way forward. If more negotiations result in Senate passage, advocates hope the Republican-led House will bring the bill to the floor.



Categories: Economy, Labor and Employment, Unemployment Insurance