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What Will Happen to Federal Unemployment Extensions?

US unemployment rate, by county (Dec, 2008)

US unemployment rate, by county (Dec, 2008) (Photo credit: MapScience)

As it stands right now, the federal Emergency Unemployment Compensation (EUC) benefits are set to expire at the end of this year. Considering the present state of the federal budget, people directly affected by those extensions wonder what will happen to those benefits.

EUC funds were appropriated by Congress in June 2008 and rolled out in stages (or tiers) in response to the prolonged high unemployment rate after the recession. These funds were only meant to support laid off workers impacted by the recession for the short-term, with the idea – or hope – that the recession would end quickly and workers would rapidly become re-employed. So deadline after deadline was set, then extended as each state “moved into another stage of recession,” and a program initially set for about a year is moving well into its fifth year. An unemployed worker who, at the beginning of the recession, could receive 26 weeks of regular unemployment insurance benefits, was extended to, at its longest stretch, 99 weeks of benefits on one claim. In the past couple years Congress has become increasingly hesitant to extend deadlines; the most recent deadline extension came in the form of the Middle Class Tax Relief and Job Creation Act of 2012 (P.L. 112-96). It extended the expiration date of the EUC program to January 2, 2013 and made several modifications to the program, creating more requirements for the claimants and providing more money to states for their enforcement.

Now Congress has approved the Budget Control Act of 2011, and as of January 2013 the budget cuts written into that act go into effect. Considering those cuts will be across the board as they stand right now (meaning no discretionary programs will be spared, including employment programs), it is hard to imagine more money being poured into the EUC. But stranger things have happened.

The hardest thing for customers in my experience to grasp is that there is no “phase-out” periods for payments. A claimant who had just started his EUC Tier 1, with 14 weeks of benefits, will lose all benefits after December 29, 2012 (and his last Unemployment check will come the week of January 2, 2013). And that’s it. That’s a hard pill to swallow.

In the past, Congress has been vividly aware of this plight; that’s why the deadlines have been repeatedly extended. This time, however, their focus is likely to be more on the automatic budget cuts, or sequestering, taking place almost the same day. Our legislators are likely to be a little distracted.

Attention is starting to be paid now, thankfully. As I said in a previous post, now that the elections are behind us lawmakers and the President can start looking at what options are available. Of course dealing with the sequestration comes first, as it affects much more than just unemployment. While cuts do have to be made, there is some leeway possible in where, when and how much will be cut to respective programs. How those cuts shake out could have a serious bearing on how the extensions fare.

Stay tuned. In the meantime, however, open communication between unemployment claimants and their legislators is always helpful and highly encouraged.

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About kimberlyjmyers

I am a workforce development professional in Washington State. I have ten years experience working with dislocated workers, vocationally impaired, and people with disabilities on many levels and backgrounds from offenders to non-English speaking refugees from around the world. The One thing the clients I have worked with all had in common: there was some barrier to employment, and I work diligently every day to identify, address and remove those barriers.

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