The Fiscal Cliff No One Is Talking About

Well, not no one. But no one with the political clout — and determination — to keep many millions of Americans from falling off a cliff.

And it really is a fiscal cliff — unlike the convergence of action-forcing events that everyone is talking about, i.e., the expiration of the Bush tax cuts and the onset of the across-the-board spending cuts triggered by the Super Committee’s failure to agree on a more sensible way to reduce the deficit.

In late December, the Emergency Unemployment Compensation program will expire, unless Congress extends it.

This, recall, is one of two federal programs that provide benefits for a limited period of time after jobless workers have collected as many weeks of benefits as their regular state programs allow — generally 26 weeks, though fewer in some states now.

Congress has already retrenched both programs.

As a result, the Extended Benefits program — the last phase in the benefits sequence — will shut down by mid-August because the law funds benefits only in states where unemployment rates are higher than they were in the recent past.

That leaves the EUC program. It’s already shrinking, such that jobless workers will soon get, at most, 73 weeks of benefits, counting the 26 most states offer.

The latest state-level unemployment figures suggest that benefits will end sooner in all but seven states and the District of Columbia.

But as things stand now, workers who lose their jobs this month will be on their own if they don’t find work before their state benefits end because the EUC program won’t be there for them.

Nor for workers who’ve already been jobless long to be getting EUC benefits. They’ll face what the National Employment Law Project calls “a hard cut-off.”

Hard indeed, especially when we see that nearly 5.2 million jobless workers have been actively looking for employment for more than 27 weeks — many for much longer.

Those who find work at all look, on average, for about 40 weeks, according to NELP. No wonder when there three and a half times as many job seekers as job openings.

The Congressional Budget Office expects the nationwide unemployment rate to remain over 8% through 2013. Congress has never let federally-funded unemployment benefits expire when the rate was this high.

But it’s a new day on Capitol Hill. Senator Max Baucus, Chairman of the Senate Finance Committee, says the issue isn’t on the radar screen — yet. Not a peep from his counterpart in the House, Congressman Dave Camp.

And President Obama doesn’t seem to be jawboning the issue, though he played a key role in getting the benefits extended last time the Bush tax cuts were due to expire.

This may just be a replay of the last two extensions. Wait till the last minute before enacting some sort of save.

A good strategy for Republicans, who had the leverage to scale back EUC — and for all we know, may have another cutback up their sleeve.

But I wouldn’t bet on it. The price tag of the last extension was about $30.1 billion over 10 years. Another extension would presumably cost less because it wouldn’t have to include funding for the EB program, even for part of the year.

But Congress — and the President — are anxious to come up with a way to halt the across-the-board cuts and still hit the agreed-on deficit reduction target.

They’re for sure going to extend the Bush tax cuts — though when and for whom remains to be seen. Many economists believe they should — at least for all but the wealthiest 2% — because a broad-based tax spike now could set back our sluggish economy recovery.

But the tax cuts will increase the deficit — unless they’re offset by deeper spending cuts or a revenue-raising overhaul of the tax code, i.e., a massive clean-out of the deductions, credits and the like.

I’ve got a hard time seeing Democrats and Republicans come together on the “grand bargain” we’re told could emerge. But ultimately they’ll agree on something.

With all the complex, divisive priorities in play, it’s not hard to imagine the EUC program falling by the wayside.

Party leader will say the answer is more job creation. Jobless workers would no doubt agree.

But in the meantime, those who’ve been looking hard and finding nothing could fall off a cliff and into poverty — if they’re not there already.

New Jobs Figures Show Need To Extend Long-Term Unemployment Benefits

Another month, another bad jobs report from the Bureau of Labor Statistics. You’ve probably already read the top-line figures, but maybe not all these.

The unemployment rate is still stuck at 9.1%. Nearly 14 million people officially unemployed last month — about the same as in August.

An additional 1 million who looked for work during the past 12 months but gave up because they felt it was futile. Presumably lots who gave up earlier and so didn’t get counted as “discouraged.”

More than 6.2 million who’d been looking for at least 27 weeks, i.e., long enough to have exhausted their regular state unemployment insurance benefits — if they every qualified. This is a higher number than reported for either July or August.

A new brief from the National Employment Law Project tells us that jobless workers today face an average of somewhat over 36 weeks of unemployment. This figure is also higher than last month’s.

Not much hope for these people in the new jobs data. A total of 103,000 more people on non-farm payrolls than in August.

But about 45,000 of them were striking Verizon employees who’d returned to work. Discounting them, the private sector created roughly 92,000 jobs.

Meanwhile, the public sector shed an additional 34,000, bringing the total to more than half a million since September 2008.

Thus, the economy actually created about 58,000 jobs last month. NELP reports that it would need to create, on average, 400,000 per month to bring the unemployment rate back down to its pre-recession level in the next three years.

One might think that these dismal figures would prompt a substantial majority in Congress to vote for some targeted investments in job creation. But only if one had been living on another planet for the last two years.

House Majority Leader Eric Cantor (R-VA) has announced that the President’s jobs bill won’t even come up for a vote. But Republicans may pick out parts they agree with, he said.

Same seems to be the case in the Senate, where Republicans, joined by two Democrats, just blocked a vote on the bill.

Surely, one would think, they could agree to extend the federal programs that provide long-term jobless workers with some extra weeks of UI benefits.

One of them — Emergency Unemployment Compensation — is due to expire at the end of the year.

The other — Extended Benefits — will lose full federal funding. These benefits kick in after EUC benefits have been exhausted. So those receiving EUC benefits now will be shut out of the EB program unless Congress acts. Those who’ve already gotten to the EB phase will lose their benefits in January.

NELP estimates that nearly 1.8 million workers will lose their benefits by February. By the end of the year, the number will swell to at least six million.

As I’ve written more often than I wish I’d had to, UI benefits are one of the best quick-acting stimulus options we’ve got. According to Congressional Budget Office estimates, every $1.00 spent delivers as much as $1.90 in economic growth and employment.

Take the expanded benefits away and you can expect job losses. The Economic Policy Institute puts the 2012 figure for EUC alone at 528,000.

But the House Republican leadership finds potential common ground with the President only in certain UI reforms, not in the proposed extension of benefits for the long-term unemployed.

“More federal spending,” their memo says. If that were the answer, adds House Speaker John Boehner (R-OH), then the economic stimulus package would have kept the unemployment rate below 8%.

What’s needed are cuts in spending, taxes and those dreadful government regulations that are supposed to do things like prevent a repeat of the reckless financial transactions that helped land us in this mess to begin with.

So it looks as if we’re in for yet another donnybrook. And yet another round of made-up reasons for letting the extended UI benefits die.

Speaker Boehner’s argument is one of them, as the Center for Economic and Policy Research shows.

And then there’s this old warhorse trotted out by Congressman James Renacci (R-OH): “[T]he length of compensation eligibility has turned from a bridge between jobs into an excuse to put off that job search for just one more week.”

As if people who’ve been laid off just kick back when their benefits average $296 a week — much less for low-wage workers, of course.

In any event, as Renacci should know, you can’t get UI benefits unless you’re actively searching for work. And, at this point, there’s only one job for every four people looking.

Pushing more people into poverty faster isn’t going to change that.

UPDATE: BLS has just released the results of its Jobs and Labor Turnover Survey for August. EPI economist Heidi Shierholz, my source for JOLTS analyses, reports that the ratio is now one job for every 4.6 jobless workers actively looking.