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.

Long-Term Unemployment Update Shows Jobless Workers Handicapped By Age

The older you are the harder it’s going to be for you to find a new job if you lose the one you’ve got. That’s one of the big messages in the Pew Fiscal Analysis Initiative’s latest update to its report on long-term unemployment.

In December 2010, 30.2% of all jobless workers who were actively looking for work had been unemployed for at least a year. But for workers in the 55-64 age bracket, the long-term unemployment rate was 10.1% higher. And for those 65 and older, 13.7% higher.

In fact, the long-term unemployment rate increased with every age bracket. Even people in what are generally considered prime career years (35-54) had a long-term unemployment rate higher than the overall average.

The economy is supposedly recovering. But the long-term unemployment situation has been getting worse — for jobless workers generally and for the older among them in particular.

In December 2009, 22.8% of jobless workers had been looking for more than a year — nearly 3.4 million in all. By December 2010, the total number of officially unemployed workers had subsided somewhat, but the number of long-term unemployed workers had increased to more than 4.2 million, or by about 25%.

The long-term unemployment rate for those aged 55-64 was 29.6% in December 2009. By December 2010, it had increased by nearly 150%. And for those over 65, by about 48%.

So we’ve now got nearly 2.4 million people who, as one of them said, are “too young not to work but too old to work,” i.e., to be given a chance to work again.

Some of them could collect Social Security retirement benefits. Maybe some of them are but can’t afford to live on the amount they get. This would not be unlikely since 2010 benefits averaged $1,1750 a month, less taxes and, for all but the youngest and poorest, a deduction of at least $110.50 for Medicare.

Benefits notwithstanding, I’d guess that some of the long-term unemployed seniors simply aren’t ready to put their skills on the shelf or give up the rewards a job can provide — a sense of competency, human contact, a chance to contribute to something bigger than one’s self, etc.

The received wisdom these days seems to be that education is the answer to unemployment. It’s apparently not the answer to protecting workers from long-term unemployment if they lose their jobs.

As the Pew update shows, long-term unemployment rates varied little by education level. Though the rate was lowest for those with a bachelors degree, it was higher for those with an advanced degree than for those with less than a high school diploma. This represents a marked change from the figures Pew reported for December 2009.

But wouldn’t further education enable workers to move from a job-sparse industry and/or occupation? Maybe, though Pew reports long-term unemployment rates over 20% in every non-agricultural sector and earlier reported nearly the same for occupational categories.

In any case,  doubt education would do much for long-term unemployed workers approaching 60 — let alone those who’ve crossed that divide. As a commenter on one of my postings observed, “A 57 year old with no experience in a new field isn’t exactly in demand.”

Washington Post blogger Ezra Klein cites some other reasons. As with all long-term unemployed people, older workers have an ever-growing resume gap that turns employers off. The better-off may not be able to move to a new location because they owe more on their homes than they can sell them for.

Most importantly, they’ve just got too many years behind them. Formal complaints of age discrimination in employment have increased markedly since the recession began.

Virtually all of these reportedly involve layoffs. But that’s surely because age discrimination at the hiring stage is very hard to prove. We’ve got way too much anecdotal evidence to believe it’s not happening.

“What are we going to do for them?” Klein asks about what he foresees will remain “a couple of million hardcore unemployed” workers, mostly older?

I’ve worried a lot about this — not least because I’m in that unemployable age bracket myself. In my fantasies, I turn the question on its head. What can they do for us?

Here are people with many years of work experience. Lots of them have specialized skills that are still in demand. They all got essential workplace skills — or they’d have become hardcore unemployed years ago. They’ve all got the energy and resilience to keep on looking for work — despite rejections or, in more cases, dead silence at the employer end.

Couldn’t we fashion some form of remuneration that would allow them to contribute these assets without living in poverty?

As I said, a mere fantasy. But what are we going to do?