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Home / Government / Jobless benefits could end for many in January (8:26 p.m. 11/18/09)

Jobless benefits could end for many in January (8:26 p.m. 11/18/09)


AP Economics Writer

WASHINGTON (AP) — More than 1 million people will run out of unemployment benefits in January unless Congress quickly extends federal emergency aid, a nonprofit group said Wednesday.

States typically provide 26 weeks of unemployment insurance for those who lose their jobs through no fault of their own, with weekly checks averaging about $300. Congress on Nov. 6 extended coverage for the fourth time since the recession began, granting 14 to 20 more weeks to try to keep about 1.3 million people who have been jobless for well over a year from running out of benefits before the end of 2009.

That boosted the total number of weeks a person could collect unemployment to as much as 99 in the hardest-hit states. But that legislation didn’t address an underlying problem: The emergency unemployment compensation program, including all 73 additional weeks, expires at the end of this year.

If the program isn’t renewed, after Jan. 1 recipients who have used up their 26 weeks of state benefits won’t get any extra coverage. The National Employment Law Project estimated Wednesday that 450,000 people will fall into that category in January.

An additional 600,000 will run out of extended coverage that month, the NELP estimates. Since the extra federal benefits are provided in stages, recipients won’t be able to continue to the next one after Jan. 1, unless the emergency program is reinstated.

Under the most recent extension, all states received 14 extra weeks. States with unemployment rates of 8.5 percent or above received six more weeks on top of that — 20 in total. But a group of state agencies that administer the benefits noted this week that few, if any, recipients will be able to access those additional six weeks if the program ends Dec. 31.

House Majority Leader Steny Hoyer, D-Md., said Tuesday that Congress would consider continuing the federal emergency program and other benefits included in the stimulus package as part of a bill focused on jobs. But Senate Democratic leader Harry Reid has said the Senate will finish work on health care before taking up a jobs bill, which could mean that it won’t act until next year.

Congress could face opposition over the cost of extending the program into 2010, especially with a proposed health care overhaul bill carrying an $849 billion price tag.

Business groups estimate that extending the stimulus package’s benefits for another year could cost $70 billion. But advocates warn that letting the program end or delaying an extension would create uncertainty for millions of recipients and potentially long gaps between benefit checks, making it difficult for many to make mortgage or rent payments.

About 9 million people are receiving unemployment insurance, 5 million on the state programs and 4.1 million on the federal extensions.

Maurice Ensellem, the NELP’s policy co-director, said state agencies will start notifying recipients next month that their benefits will run out, unless Congress acts.

“That’s going to create a lot of anxiety,” Ensellem said. “Every interruption in benefits creates real chaos.”

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