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.


Long-Term Unemployment Benefits Need More Than Extension

January 1, 2012

Huffington Post blogger Arthur Delaney has been hammering on an important fact about the just-passed temporary extension of long-term unemployment insurance benefits. It won’t fully extend benefits for everyone who’s getting them now.

By the time the temporary extension expires, workers in 11 states will have lost their benefits, he writes, even though they won’t have reached the maximum they’d have been entitled to in early December.

This isn’t because the Senate leaders who negotiated the bill changed the law. It’s because they didn’t.

Here’s the situation, as best I can summarize it, with help from a somewhat outdated, but still useful brief by the National Employment Law Project.

Under federal law, states can establish an Extended Benefits program to provide jobless workers with extra weeks of benefits during times of unusually high unemployment.

What’s unusually high can be measured in one of two ways. Most states and the District of Columbia have chosen what’s called the total unemployment rate.

The TUR is the most recent three-month average of the state’s regular unemployment rates as compared to the average for the comparable period during a prior year.

For a state to “trigger on” to the EB program, the current three-month average must be at least 6.5% higher than during the base-year period. That provides 13 extra weeks of UI benefits. A 10% higher average provides 20 weeks.

By the same token, a state “triggers off” the program when its three-month average isn’t sufficiently higher than during the comparable period. A state can thus “trigger off” when its unemployment rate is still very high.

Ordinarily, the federal government pays half the costs of extended benefits, and states pay the other half. The Recovery Act made the federal government temporarily responsible for the full costs.

When Congress extended the EB funding provision in 2010, it also gave states the option of changing the “look back,” i.e., the year their current unemployment rate would be compared to.

Instead of the usual one or two, they could have a three-year “look back.” This, of course, was in recognition of the long duration of high unemployment rates in a great many states.

Thirty-two states and the District of Columbia adopted the three-year “look back.” But now that’s not enough to keep states from triggering off, even though their unemployment rates are considerably higher than normal.

When that happens, workers who’ve been jobless long enough to get to the EB stage will get no more benefits. Other workers who reach that stage will also be in the same straits as the so-called 99ers are now.

So the EB provision needs another fix like the one Congress made last time. And the temporary extension law doesn’t have it.

Delaney reports that some House Democrats wanted it, but felt they had to give way to get any extension passed. “That’s the process,” said Congressman Steny Hoyer, the second highest-ranking member of their leadership team.

However, it’s also true that the President’s jobs bill didn’t change the “look back” either. So in this respect, Republicans are right when they say their plan resembles parts of his.

The Democrats could still insist on a straightforward four-year look back as part of the year-long extension package. But it’s doubtful they will.

Too many other issues — including the highly-controversial pay-for, i.e., how to extend all the measures in the package without increasing the near-term deficit.

Advocates reportedly hope for some split-the-difference compromise. Perhaps a waiver from the standard TUR trigger-off for states with double digit unemployment rates.

There aren’t all that many of them, however. Could be fewer as the months roll on.

So it looks as if many long-term jobless workers will be out of luck, even if the EB trigger language gets a partial fix.

But I hope I’m wrong.

We’ve got more than enough people falling into poverty without a pennywise-pound foolish decision to cut off a relatively small cash flow to workers who are still trying to beat the worse than 4-1 odds of finding another job.


Follow

Get every new post delivered to your Inbox.

Join 187 other followers