Deadline for Federal Jobless Benefits Looms
February 14, 2012 | San Francisco Chronicle | Link to article
Once again, people receiving federal unemployment benefits will start losing them unless Congress can agree on some way to extend them past the end of this month.
Unable to agree on a full-year extension at the end of 2011, lawmakers instead extended federal unemployment benefits - along with the two-percentage-point cut in employees' payroll taxes and a reimbursement for doctors treating Medicare patients - for just two months, until Feb. 29.
On Monday, House Republican leaders proposed separating the payroll tax cut from the other two measures and extending it through the end of this year without paying for it with other taxes or spending cuts. However, they still want unemployment benefits paid for and have proposed other changes to the program, including:
-- Reducing the maximum benefits from 99 to 53 weeks.
-- Letting states require the unemployed to pass a drug test before getting benefits. State legislatures would have to adopt this requirement and find a way to pay for it.
-- Requiring benefit recipients to have a high school diploma or GED or be making progress toward a GED. State legislatures could waive this requirement in cases in which it was "unduly burdensome," but it's unclear how this waiver would apply.
-- Letting states use unemployment insurance funds for certain purposes other than paying unemployment benefits, such as "demonstration projects" designed to promote more rapid re-employment of jobless workers.
Today, the federal government pays for up to 73 weeks of unemployment benefits after a person exhausts his or her regular state benefits, which last up to 26 weeks, for a total of 99 weeks.
Federal benefits arrive in four consecutive tiers that total 53 weeks. In high-unemployment states, people can receive up to 13 or 20 additional weeks under a program known as Extended Benefits nationally and as Fed-Ed in California.
If Congress does not approve an extension of benefits past Feb. 29, people who are receiving one of the first four tiers can finish up that tier but cannot move on to the next one. People receiving Fed-Ed, however, would lose their benefits almost immediately. "You get two weeks' notice," says Maurice Emsellem, policy co-director with the National Employment Law Project.
Even if Congress extends federal benefits under the existing rules, many people would soon lose out on the final 13 to 20 weeks of benefits (Fed-Ed) because their state unemployment rates are no longer rising.
To qualify for this program, a state's unemployment rate must be at least 8 percent and at least 10 percent higher than it was during the same period three years ago.
Only 32 states still qualify for this program.
Emsellem estimates that if unemployment rates remain about where they are, three of those states will drop off in February, 10 in April and eight in May. Six other states - including California - will no longer qualify in June. The remaining five states will lose eligibility later this year.
Some Democrats have proposed changes to this program that would prevent many states from dropping off, such as changing the so-called look-back period to four years from three.
Another Democratic proposal would restructure the entire federal program in a way that would shrink the maximum weeks of benefits to 93 from 99.
Congress has renewed federal unemployment benefits many times since the recession began, but there is no guarantee it will again, given concerns about the deficit and an improving job market.
Last week Federal Reserve Chairman Ben Bernanke gave federal unemployment benefits mixed reviews.
"On the one hand, it obviously provides some support for people who are unemployed or have unemployed family members and those people in turn will be more likely to spend, which will add to the demand in the economy," he said. But he also said it could encourage some people to stay unemployed for a "little longer," although for some that could result in finding a "more appropriate job."
Emsellem believes Congress will renew benefits. "It's really hard to picture them not reauthorizing the benefits, although they like to take it to the brink."
Whether it comes with any changes to the program remains to be seen.
Many Democrats and advocates for the poor and unemployed strongly oppose the drug testing requirement. They say it's demeaning, a waste of money because so few people test positive and possibly unconstitutional.
The GED requirement, they argue, while well intentioned, would unfairly target the 13 to 14 percent of unemployment benefit recipients without a high school diploma and stress adult-education programs, which are already bursting at the seams.
CLASP, an advocacy group for low-income households, supports policies that increase worker skills and education, but "it has to be done by education and workforce policy at the federal level" and not through state unemployment offices, says Neil Ridley, a senior policy analyst with CLASP.