The year is winding down and only days remain before the deadline set in the original Budget Control Act of 2011, after which (January 2, 2013 to be precise) massive accross-the-board budget cuts automatically take effect. If nothing is done by Congress prior to that time, most federal programs could be heavily affected (for more information, read “What Will Happen to Federal Unemployment Extensions?”), not the least of which is the federal Unemployment extension, originally set in place in 2008.
According to Bureau of Labor Statistics, about 5 million people have been out of work for 6 months or more. That’s about 40% of all unemployed workers. In other words, 40% of Unemployment claimants, those who have exhausted their 6-month regular benefits, will find themselves without further benefits after December 29, even if they just started their extension benefits.
According to New York Daily News, the Congressional Budget Office said in a study last month that extending the current level of long-term unemployment benefits another year would add 300,000 jobs to the economy. The average benefit of about $300 a week quickly gets spent on necessities such as food and rent, the report said, stimulating the economy. When those benefits are gone, those families rely heavier on social resources to help pay rent and utilities. These kind of programs, on the federal level, are the ones targeted for budget cuts next year. It’s like a 1-2 punch for families of unemployed workers.
Partisan lines are still being drawn in Washington DC. Democrats and Republicans have not come to any agreement on how to minimize the impact of the upcoming fiscal cliff. Talks about a deficit deal have not progressed beyond rejecting each others’ counteroffers.
Concerned citizens should maintain open communication with their legislators about the upcoming fiscal cliff. Unless an agreement is reached, we’re all going over the cliff together.
- Fiscal Cliff ‘Cliffs Notes’: How We Got to the Edge in 5 Easy Steps (dailyfinance.com)
- Nonprofits at Risk if Extended Unemployment Benefits Fall off the Fiscal Cliff, Reports Unemployment Services Trust (prweb.com)
- The Fiscal Cliff – in plain English (rogerkohlcfo.com)