CHN: Hope for Unemployment Insurance Extension Fades for Now

Once again Congress has gone home for a break without addressing the critical issue of extending the federal Emergency Unemployment Compensation (EUC) program.  EUC provides additional weeks of insurance when workers have exhausted their state benefits.  Failure to extend the program before going home for the holiday break resulted in 1.3 million workers left without this safety net program when their EUC expired on December 28.  Each week since then 72,000 additional workers are left without assistance.  Contrary to some myths, these are not workers 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 December, the national unemployment rate dropped to 6.7 percent from 7.0 percent in November, but jobs grew by a paltry 74,000.  So, the decline in the unemployment rate is not attributable to more workers finding jobs, but rather to the drop in the workforce participation rate to 62.8 percent, the lowest rate in 35 years according to the Labor Department.   Of particularly concern is the number of long-term unemployed – 37.7 percent of the unemployed have been out of work for six months or longer – the highest ever compared to times Congress has allowed EUC to expire after previous recessions.  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 pay-fors and with the support of the majority of Republicans.  This time around Republicans are demanding offsetting cuts.  On January 7, in what looked like a potential breakthrough, all 54 Democrats and Independents present and 6 Republicans agreed on a procedural vote to move to debate on the extension of EUC.

The maximum number of weeks of EUC had already been cut from 99 to 47.  In a significant concession, Democrats agreed to cut the maximum number of weeks again from 47 to 31, with workers in states with lower unemployment rates receiving even fewer weeks of benefits.  Republicans, however, soon filed and insisted on votes on amendments that were unpalatable to Democrats.  One amendment would have paid for the extension of EUC by denying the Child Tax Credit to low-income children in immigrant families.  These working families pay more than $13 billion in payroll taxes each year, and over 60 percent who use the refundable Child Tax Credit earn less than $25,000 per year.  Another amendment would have helped pay for the extension of EUC by denying unemployment benefits to people who receive Social Security Disability Insurance, work part-time, and are now eligible for partial benefits if they become unemployed.

On January 14, Senate Majority Leader Harry Reid (D-NV) attempted to end debate on the Emergency Unemployment Compensation Extension Act, S. 1845, which provides a 3-month extension of benefits.  The vote which required a 60-vote threshold failed 55-45.  A second vote on an amendment extending EUC for 11 months failed 52-48.

Democrats in the Senate say they are committed to finding a way forward when they return from Congress’ one-week break.  They will press for a 3-month extension without offsetting cuts. Senator Dean Heller (R-NV), who co-sponsored S. 1845 along with Senator Jack Reed (D-RI), is working with other Senate Republicans to find ways to pay for an 11-month extension of EUC.  Even if the Senate is successful, the Republican-led House will present another huge hurdle to passage.


Labor and Employment
unemployment insurance