How Much Longer Before Emergency Unemployment Is Extended?

April 3, 2014

The tool I use for this blog tells me, among other things, the search terms that brought people to my posts. One last week was so sad. “How much longer before emergency unemployment is extended.”

Sad because I suspect the query writer had a personal interest. Sadder because I haven’t the foggiest — and no one else does either. Saddest because I’m not sure Emergency Unemployment Compensation will be extended.

On the upside of this ongoing saga, the bipartisan Senate group agreed on some improvements to the bill I last wrote about. And the Senate will pass the bill today — perhaps before you read this — since six Republicans joined all Democrats in agreeing on the motion to vote.

On the downside, we’ve no evidence that House Speaker John Boehner will permit a vote on the bill. And he’s seized on a new reason, though it’s obvious any reason would do.

What the Senate Passed

Like the previous version, the final Senate bill renews EUC for five months, back-dated to the time it expired.

Unlike the previous version, the offsets no longer include any erosion in SSI (Supplemental Security Income) benefits. We’ve instead got another of those pension accounting devices — perhaps not the most fiscally responsible pay-for, but it gets the job done without hurting anybody.

A provision that required agencies to assess the reasons a jobless worker was still unemployed is gone — perhaps because negotiators realized how absurd it was at a time when there are only 40% as many job openings and people looking.

Also gone is a related provision requiring agencies to develop specific action plans for all EUC recipients — a daunting task for agencies that have been under-funded for a long time and will have extra work due to the benefits lapse.

Some other provisions related to “work suitability,” job searches and the like have been replaced by a benign mandate for a Government Accountability Office study.

But the ban on federally-funded unemployment benefits for millionaires and billionaires is still there — one of those cheap political gestures, like the ban on food stamps for lottery winners. A small price to pay, I suppose, but a bad precedent for a social insurance program.

Over in the House

As I’ve written before, Speaker Boehner has drawn a line in the sand. A bill to renew EUC must not only be paid for, but paired with other measures that “will get our economy moving again.”

The nonpartisan Congressional Budget Office earlier concluded that a year-long EUC extension would boost the economy and create as many as 300,000 jobs. But that apparently won’t do.

What would do isn’t clear. Boehner is still just saying he’s got to see something that “would help the economy and help people get back to work.”

He has, however, made occasional references to “dozens of bills” House Republicans have passed, e.g. to hamstring the regulatory agencies, block grant (and freeze funding for) job training programs and, needless to say, repeal the Affordable Care Act.

He now has a new arrow in his quiver, thanks to what seems to have been an ill-advised letter from the National Association of State Workforce Agencies. Giving the organization the benefit of the doubt here, since anyone with a grain of political sense would have known how the letter would be used.

Briefly, NASWA cites administrative challenges that could lead to delays in implementing the EUC renewal legislation, along with a potential for some overpayments.

No one, to my knowledge, has said it would be quick and easy, though it surely would have been if Republicans had quickly agreed to support a renewal.

Yet state agencies have successfully implemented retroactive extensions before. The Secretary of Labor cites twelve, including some with changes that “were as or more complex than those included in the current bill.”

And unless I’m mistaken, the final version of the bill addresses some of the specific concerns the state agencies raised — notably how to deal with the millionaire ban.

Boehner nevertheless insists that the bill is “unworkable,” citing the NASWA letter. The president of the association asserts that the letter didn’t “label” the bill that way — suggesting, at least to me, some second thoughts on the advisability of sending it at all.

The plain truth is that it doesn’t matter. Senator Dean Heller, a lead Republican on the bipartisan team, rightly observes that “no matter what solution is reached, there is some excuse to deny these much-needed benefits.”

So if it isn’t one thing, it will be another — unless and until something happens to persuade enough House Republicans that denying a lifeline to long-term jobless workers and their families is no way to show that the party care about everyday folks.

The stalemate — overcome in the Senate, but not the House — has thus far harmed well over 3.4 million jobless workers. An additional 72,000 join their ranks every week. Their poverty rate nearly doubles.

How much longer will this go on?

UPDATE: Prognosticators, including me, were wrong. The Senate vote on the EUC bill has been postponed until Monday.

 

 


Next Round in Battle to Renew Long-Term Unemployment Benefits

March 10, 2014

Last Friday, the Bureau of Labor Statistics reported a sharp increase in the number of long-term jobless workers — 203,000 more who’d been unemployed and actively looking than in January.

This brought the average number of weeks jobless workers had been looking up to 37.1 — about 11 weeks more than most state unemployment insurance programs cover.

At least two million jobless workers have no UI benefits now, but would if Congress renewed Emergency Unemployment Compensation — and back-dated it to the end of December, when the program expired.

As I’m sure you know, Senate Democrats have been trying to pass an EUC extension since mid-December. Republicans haven’t delivered the five votes needed for the Senate to vote on the extension itself.

The ostensible hang-up is the offset, i.e., the source or sources of funds that would keep the extension from adding to the near-term deficit. But some of the potentially persuadable Republicans have further complicated matters by insisting on amendments to reform UI.

And as if that weren’t enough, they wanted the package to include a repeal of the temporary, modified cost-of-living adjustment for military pensions that was part of the December budget deal.

Well, the Senate took care of the repeal in mid-February, using a pay-for Republicans wouldn’t accept for the EUC extension. Now it’s going back to EUC again.

Majority Leader Harry Reid is calling for a six-month extension — five months shorter than the paid-for version he’d earlier proposed. He’d use savings already achieved in the new Farm Bill as the offset. Politico reports the cost at about $12 billion. That would leave about $11 billion for deficit reduction.

Seven Republicans have countered with a five-month extension. They’ve got an altogether different pay-for. And they fold in program “improvements,” including one that has little or nothing to do with unemployment compensation.

Too much to cram into one post. So I’ll deal with the pay-for here. As you’ll see, the Gang of Seven seems to have moved toward the Democratic majority. This, alas, is not an altogether good thing.

The pay-for has three parts. The first would extend so-called pension smoothing provisions that Congress earlier used to help pay for the highway bill.

Basically, pension smoothing allows employers to temporarily reduce their contributions to employee pension plans. This raises revenues for awhile because the contributions are tax-deductible.

But it then loses revenues because employers have to make up what they didn’t contribute earlier. The losses, however, fall outside the 10-year period used to estimate what federal laws will cost.

In short, it’s what the Center on Budget and Policy Priorities calls a “timing gimmick.” It also, as the Committee for a Responsible Federal Budget says, raises the risk that pension funds will need a bailout, thus further increasing federal costs.

Senate Republicans shot down pension smoothing when Reid tried to use it for a three-month EUC extension — or at any rate, they blocked the bill, claiming (rightly) that he limited their chances to amend it.

A second part of the pay-for is a modified version of an amendment Senator Rob Portman wanted to offer. In its new iteration, severely disabled workers who receive UI benefits would lose the same amount from their SSDI (Supplemental Security Disability Insurance) benefits.

This too was a pay-for Reid earlier offered — and borrowed from the President’s proposed budget. But it still “uniquely burdens” disabled workers, as Los Angeles Times columnist Michael Hiltzig says.

It also undermines the work incentive in SSDI. And it establishes a terrible precedent of raiding Social Security to fund other benefits programs, as the Consortium for Citizens with Disabilities warned several months ago.

The last part of the pay-for extends customs users fees through 2024. These are charges imposed for certain activities of the U.S. Customs Service, e.g., clearing merchandise for import.

So for better and worse, the Gang of Seven seems to have come round to a pay-for the Democratic majority could accept. But, as I said, it’s paired with some problematic “reforms” to the EUC program.

Politico reports that Reid may take another stab at passing an EUC bill this week. How far he’ll move to pick up the Republican votes he needs remains to be seen.

How far he should move is a daunting question.


Sequester Hits Long-Term Jobless Workers Hard

July 11, 2013

We may not yet have hard data for everyone affected by the across-the-board cuts to many non-defense programs — hence the overly-upbeat Washington Post article I recently took apart.

But we do now have a report on losses that long-term unemployed workers and their families are suffering.

It confirms — and then some — the Labor Department’s update for the Post, which said that unemployment insurance benefits cuts were, in some states, as high as 11%, rather than the 9.4% it predicted earlier.

The affected workers are those who’ve been unemployed longer than their regular state UI programs cover — generally 26 weeks.

Federally-funded Emergency Unemployment Compensation benefits have given them some ongoing cash income for awhile.

The sequester cut funding for the already-shrunken EUC program by a total of $2.4 billion. States and the District of Columbia were left to figure out how to deal with their share of the cut.

The National Employment Law Project’s tabular report tells us what each has done and the effect on EUC benefits, both average and maximum. Also the approximate number of jobless workers affected.

Thirteen states and the District acted swiftly. So the pain came sooner, but was less severe. Here in the District, for example, benefits were cut, as of the end of March, by 10.7%.

This has left somewhere around 8,600 workers with benefits averaging $1,024 a month — about $7,240 less than the federal poverty line for a family of three. (Shows that the benefits weren’t all that comfortable a hammock, even before the cuts, of course.)

Some states took the same across-the-board approach, but started their cuts later. The percent cuts thus had to be larger.

In Maryland, which began its cuts at the end of June, workers lost 22% — an average of $72 a week. Virginia workers lost 14.2% — an average of $40 a week — because the state began its cuts somewhat earlier.

Seven states realized all the required savings by limit the cuts to new EUC beneficiaries — or to them and those moving to the next tier, i.e., the additional weeks of benefits they could get because they were still unemployed.

A couple of states decided to pay no benefits for one week in each of three months. Two other states reduced the number of weeks benefits would be paid to workers who’d been unemployed the longest (and still eligible for EUC).

And North Carolina, which cut both the weeks and maximum benefits in its own UI program, effectively wiped out EUC benefits because the federal law denies funding to states that cut the benefits they themselves provide.

Rounding out the list are two states — Louisiana and Nevada — that still haven’t put their EUC savings plans in place. Their cuts will, of course, have to be enormous. And Louisiana will be starting from benefits averaging a mere $201 a week.

Echoing the Labor Department, NELP says that as many as 3.8 million workers and their families will be affected this year.

Those already in the EUC program were receiving, on average, $1,156 a month. They’ll be trying to somehow get along on $172 less. “That alone,” NELP notes, “can be the difference between making — or not making — a rent, car or mortgage payment.”

Meanwhile, the job market is still “in a slog,” as the Economic Policy Institute’s Heidi Shierholz reports. Another round of spending cuts will hardly improve it.

Yet we see no sense of urgency to do anything for the jobless workers whose UI benefits won’t keep them and their families afloat — or those who will come to the end of their last tier and have nothing at all.


A Happy New Year to You and Two Million Jobless Workers

January 2, 2013

Before I knew Jesse, I thought that New Year’s Day was mainly for recovering from hangovers — and for making resolutions. Nothing like a headache to make you resolve to lead a better life.

Now I know the day is also for eating greens (for money), black-eyed peas (for luck), some sort of pork (we’re not sure for what, though I’ve read it represents progress) and cornbread (for nothing, so far as I know, except that it goes well with the mandatory dishes).

I’ve made the usual resolutions — eat less, exercise more, etc. For the blog, I’ve resolved not to be so persistently gloomy and angry. Surely there’s some unequivocally good news to impart, even in these troublesome days.

I know from past experience that the new leaves I vow to turn over usually wilt before the crocuses sprout. But it’s surprisingly easy to begin the new year with a cheerful post.

Because more than two million jobless workers who were about to lose their unemployment insurance benefits will get them after all, thanks to the last-minute, barebones bill Congress passed to pull us back from the so-called fiscal cliff.

The workers, as you probably know, are those who’ve been actively looking for new jobs for more than 26 weeks — the period that most regular state UI programs will cover.

They’ve been getting federally-funded benefits under the Emergency Unemployment Compensation program that was originally part of the Recovery Act.

The last extension of the program kept it alive, though in shrunken form, through December.

So all those jobless workers faced a hard cut-off of their EUC benefits — this at a time when there are still more than three job seekers for every job available.

Another million or so workers would have had no UI benefits by April — and by the end of the year, about three-quarters of all jobless workers.

The belated, but welcome action by Congress will be good not only for many of these workers, but for our slowly recovering economy, which will surely need all the help it can get in the months to come.

As go-to economist Mark Zandi has testified, extending UI benefits will deliver a bigger bang-for-the-buck boost to the economy than virtually any other measure in the stimulus arsenal.

The Congressional Budget Office recently reported that the spending will save and/or create 300,000 jobs — or looked at another way, that 300,000 jobs would have been lost if Congress had refused to invest in EUC benefits.

But economists didn’t save the EUC program. We’ve got to give the President credit for insisting on the extension.

More credit, I think, is due to the advocacy organizations that kept the issue on the front burner — and to 134,000 of us in the grassroots who joined the effort.

This in itself is good news because it tends to suggest our voices matter — and, of course, in some cases our votes.

Worth recalling in the months ahead because we who care about poor, near-poor and about-to-be-poor people have our work cut out for us.

UPDATE: I should also have acknowledged the majority of Democrats in the Senate and the House Democrats who urged their colleagues to extend the UI benefits.


The Fiscal Cliff No One Is Talking About

August 6, 2012

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.


Long-Term Unemployment Benefits Saved, But Scaled Back

February 17, 2012

So the Republicans and Democrats agreed on a deal to extend long-term unemployment insurance benefits — defying predictions of another cliffhanger or worse.

Also extended, as you’ve probably read, were the employee payroll tax cut and the “doc fix” to avert huge cuts in Medicare reimbursements. As you may not have read, some programs for low-income people got a new, temporary lease on life as well.

The UI benefits extension is surely good news for the million or so jobless workers who’d otherwise have lost their benefits in March. Also good news for jobless workers who’d have run through their regular state benefits by year’s end.

No extension would have meant benefits losses for nearly 4.5 million by December — 12,600 in the District of Columbia alone.

Add to the good news column some changes in the UI program that didn’t get into the deal — or survived only in more palatable forms.

The most problematic would have denied benefits to jobless workers without a high school diploma or the equivalent unless they were enrolled in classes leading to same. There’s no such barrier in the final bill.

But (why is there always a but?) the well-known 99 maximum weeks will soon be a thing of the past.

As I wrote awhile ago, the Extended Benefits program kicks in only when states’ unemployment rates are higher than they were during a comparable period in a prior year — and kicks off when they aren’t.

Because Congress didn’t change the law to let states shift their comparison period back, more and more states will “trigger off” EB. The expectation now is that no state — or the District — will be able to offer the final 10 or 20 weeks of benefits by December.

Because Congress did change the law, fewer weeks of benefits will be available under the other federally-funded program — Emergency Unemployment Compensation.

EUC benefits kick in directly after workers have exhausted their regular state unemployment benefits. They’re structured in tiers.

At this point, the first two are available to all jobless workers, giving them a maximum of 34 weeks — less only if they find employment.

Workers qualify for the next tier only if they live in states where the unemployment rate is at least 6%. That nets them 13 more weeks.

If they live in states where the unemployment rate is at least 8.5%, they can move to a fourth tier and get another 6 weeks.

The total then for workers in most states has been 79 weeks — counting the weeks available in their regular state program, but not EB.

The extensions legislation cuts the maximum number of weeks to 73, beginning in September. From June through August, the maximum will remain 79 weeks, but only in states where the unemployment rate is at least 9%.

At the same time, the legislation establishes a minimum 6% unemployment rate for the second tier. And it raises the minimum unemployment rates by half a percent for the remaining tiers.

As of September, the third tier becomes four weeks shorter and the fourth, final tier four weeks longer.

Bottom line is that, as of September, only 63 weeks will be available in most states. At this point, jobless workers have more weeks available in all but seven.

I suppose we should be grateful. The Republicans reportedly wanted to cap benefits at 59 weeks, as the original House bill would have.

So the Democrats got more than a strict split-the-difference deal, though only because they’d already followed the Obama administration’s lead in letting states trigger off while their unemployment rates remain abnormally high.

Even here, they negotiated a temporary fix, giving states with unemployment rates of at least 8.5% an additional 10 weeks of EUC if they’ve no EB weeks to provide. The boost is good only through May, however.

Huffington Post blogger Arthur Delaney reports that it will benefit jobless workers in at least 10 states.

I’d be remiss if I didn’t note another Democrat victory here. The estimated $30 billion the UI benefits extension will cost won’t be offset by any tampering with the Child Tax Credit.

If House Republicans had had their way, refunds that help support more than five million low-income children would have been part of the pay-for.

So it’s not a perfect deal. But a deal got made. And it’s a whole lot better than the extension the House passed in December.

UPDATE: After I (hastily) posted this, I found that the Center on Budget and Policy Priorities had created two tables that lay out the changes in the EUC program and the total weeks of benefits that will be available, with and without EB. A clearer picture of the complex end results than my prose could manage.


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