Economy

Democrats press to extend emergency unemployment program

If Congress fails to reauthorize program, 1.3 million jobless will immediately be cut off from federal aid

Job seekers at a job fair in Portland, Ore., in September.
Natalie Behring/Bloomberg/Getty Images

The Obama administration and House Democrats intensified their efforts Thursday to prevent federal emergency unemployment benefits from expiring at the end of the year amid warnings the move would slow job creation and hurt the country's economic productivity.

Congressional Republicans have indicated that they are willing to let the benefits expire on Dec. 28, which would immediately cut off aid to 1.3 million long-term unemployed Americans, according to the White House.

"I don't see much appetite on our side for continuing this extension of benefits," said Rep. Tom Cole, R-Okla., to reporters Wednesday. "I just don't."

However, House and Senate negotiators have left open the question of extending the federal program amid budget talks to fund the government in 2014 and prevent another shutdown in January.

Congress authorized the Emergency Unemployment Compensation Program in 2008 as the country teetered on the brink of the deepest recession in modern times. For the unemployed, the program provided federal benefits once their state unemployment insurance ran out. The program allowed individuals to collect benefits for up to 99 weeks. The program has since been scaled back, and states now offer their insurance for anywhere from 19 weeks to 73 weeks, according to the Center for Budget and Policy Priorities. Funding the program through 2014 would cost approximately $25.2 billion, according to the nonpartisan Congressional Budget Office.

House Democrats said they hoped the issue of unemployment insurance would be resolved before Congress starts its holiday break on Dec. 13.

As part of a push for an extension, the Democratic Steering and Policy Committee held a hearing Thursday to highlight the impact on those for whom federal aid had been a lifeline when they found themselves out of work for an extended period. To coincide with the hearing, the Obama administration released a new report about the wide-ranging economic impact of letting the insurance expire.

According to the report, prepared by Obama’s Council of Economic Advisers and the Department of Labor, failing to extend unemployment insurance would result in less money for would-be workers to spend, which in turn would dampen consumer demand and result in 240,000 fewer jobs in 2014. The Congressional Budget Office and an analysis by JPMorgan have also predicted that GDP would be 0.2 to 0.4 percentage points lower in 2014.

The hearing, organized and attended solely by House Democrats, including Minority Leader Nancy Pelosi, aimed to put a face on the ominous statistics. Three witnesses, who either had been recipients of unemployment benefits or expected to be relying on them soon, spoke to the need for the program, with the jobless rate continuing to hover at 7 percent and millions more who have dropped out of the official statistics.

“We talk in Washington about big numbers,” said Rep. Steny Hoyer, D-Md. “Too infrequently we talk about individuals — the Stans, the Veras, the Lisas of America that our actions affect immediately and directly on a daily basis.”

Lisa Floyd told members of Congress that she was laid off in April after 14 years working as a volunteer services director at a hospice center in Virginia. She said she had devoted all her time and resources in the last eight months trying to find work, sending out hundreds of resumes and spending countless hours scouring Internet job boards.

Federal benefits kicked in for Floyd in November, after her state benefits ran out. Without the federal program, she said she would have lost her home. Earlier this week, she finally managed to secure a new job, albeit with a pay cut.

“Get rid of that wrong impression that people who are on long-term unemployment are coasting along singing a song, and they’re all laying in front of the TV,” Floyd said. “That is not what we’re doing. We’re out there every day … pounding it hard.”

Vera Volk, who worked in the biotech pharmaceutical industry for 20 years before being let go in May from her job in Lynn, Mass., spoke about her own experiences. Since losing her job, partially due to sequestration cuts, she has also relied on state benefits to stay afloat while hunting for work. Her state benefits run out at the end of the month, and if Congress does not reauthorize the federal program, Volk and her husband will be without any income.

“I wake up with fears and terrors,” she said. “I don’t know what I’m going to do.”

Volk has a bachelor’s degree in microbiology and a master’s in immunology, but those credentials have not shielded her from joining the ranks of the long-term unemployed. She said she has spent eight hours a day looking for work, and even sought seasonal and retail work, to no avail. It is particularly difficult to find work as an older, experienced worker, Volk said, when employers are looking for younger employees whom they can pay less.

“We’re all here to earn a living and be responsible to our communities and our nations,” she said.

Stan Osnowitz, an out-of-work electrician who has been searching for work since his last job ended, testified to the lasting psychological impact of long-term unemployment, which some economists have branded a pressing economic crisis.

“I see myself as a craftsman. I build, I like building,” he said. “That’s my pride. When you don’t have that, you feel worthless.”

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