Millions may lose benefits as Congress debates unemployment extension

A report by the National Employment Law Project shows that in January of next year, one million American workers will become ineligible for unemployment benefits. This number will swell to 3.2 million by March 2010. This will happen if Congress does not act to extend the deadline imposed by the stimulus bill, or the American Reinvestment and Recovery Act (ARRA).

The expiration date is currently December 31, 2009 - this will cut off the eligibility for unemployed workers to draw on unemployment benefits extension programs funded with federal dollars. Such federal extensions are necessary because state budgets are severely strained at present, and states are usually constitutionally required to have balanced budgets.

In addition to the moral necessity for government to provide assistance to its citizens in time of great need, unemployment benefits have direct economic benefits. “Every dollar spent on unemployment benefits generates a $1.64 increase in economic activity,” according to House Representative Jim McDermott (D-WA), sponsor of bill HR 4183, which would extend the eligibility deadline until the end of March 2011.

There is debate on how to pay for extending the unemployment benefits deadline. McDermott estimates the cost at about $80 billion. With health care, end-of-year budget issues, and another stimulus and/or jobs creation bill in the works, the Senate has a lot on its plate.

Fixing the problem with the unemployment deadline should be a priority for the Congress now - before any of the above.

What do you think?

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