Democrats Unite Around Extending Emergency Unemployment Compensation

Democrats Unite Around Extending Emergency Unemployment Compensation

The Obama administration joined congressional Democrats on Friday, signaling its support for extending long-term unemployment insurance just weeks before it is set to expire. The federal Emergency Unemployment Compensation (EUC) program – scheduled to end between Christmas and the New Year – provides unemployment insurance to millions of Americans who have been unemployed for six months or longer.

With the U.S. Department of Labor reporting 4.1 million long-term unemployed Americans as of September, an estimated 1.3 million are expected to lose access to EUC, according to the Nation Employment Project. Additionally, another 850,000 will run out of state employment insurance in the first three months of 2014 – at which point they will no longer have access to EUC.

Reauthorizing the benefits, however, will be an uphill battle for congressional Democrats. With the divided Congress still trying to reach a budget deal that would replace sequestration cuts, an extension of the program is not likely.

Yet, some lawmakers remain optimistic.

Senator Patty Murray (D-WA), chairwoman of the Budget Committee, “clearly supports the policy, is interested in doing it and is hopeful there will be a path in this budget conference,” a senior Democratic aide told the New York Times.

“She will continue to work with Republicans to see if it’s possible in this deal,” the aide added.

House Budget Committee chairman Paul Ryan (R-WI) is “committed to finding common ground,” according to his spokesman, William Allison. However, he also noted that Ryan hopes “both parties can work together to cut spending,” which is a big reason why Republicans are against the program, which has cost $250 billion since it was enacted in 2008.

Other Republicans argue that the emergency program is no longer necessary, because the economy is recovering and the unemployment rate is dropping.

The Economic Policy Institute finds that not extending the program will hinder job growth, however, because consumers would have less money to spend, making it more difficult for employers to hire workers. More specifically, the EPI reports that not extending the program would result in the loss of 310,000 jobs in 2014. And though extending the program would cost $25.2 billion in 2014 – less than the approximate $30 billion it cost in 2013 – the EPI says the “economic boost would be much greater because this spending would have a large ‘multiplier’ effect.”

It’s also important to note that the longer a worker has been unemployed, the more difficult it is to find job opportunities.

There is “no question” that Congress should extend the program, top White House economic advisor Gene Sperling told the Times, saying that it’s “high bang for the buck for the economy, reduces poverty, and helps workers who lost jobs due to no fault of their own get back on their feet.”

“Why would you not extend now, when you’re dealing with the nearly unprecedented levels of long-term unemployment coming off such a historic recession?” Sperling added. “This would be the wrong time to do it.”

Photo: Wisaflcio via Flickr


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