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Millions could lose jobless benefits if no action taken

Published: Wednesday, Dec. 19, 2012 1:15 a.m. CDT

WASHINGTON – Ever since she lost her graphic design job at a printing company in April, Dorothy Winn of Fresno, Calif., has been looking for that elusive “next job” and wondering how long she can hold on without it.

When her 26 weeks of state unemployment insurance expired in November, emergency federal funding assured that Winn’s $238 weekly benefit checks would continue.

As the “fiscal cliff” approaches, however, Winn is one of 2.1 million Americans who stand to lose their federal jobless benefits at the end of December unless Congress extends the Emergency Unemployment Compensation program.

Failure to do so would leave of millions of families unable to pay for their homes, health insurance, automobiles and utilities while they continue looking for work in the sluggish job market.

“Two million people are just weeks away from losing their last form of stable income,” said Christine Owens, the executive director of the National Employment Law Project. “Unemployment insurance is the lifeline for millions of people who are working hard to get back on their feet in a weak economy.”

While most states provide jobless workers up to 26 weeks of unemployment insurance, the federal program adds an additional 14 to 47 weeks, depending on the state’s unemployment rate.

After spending more than $520 billion on beefed-up state and federal jobless benefits since 2008, congressional Republicans are loath to extend the federal funding a full 3 1/2 years after the recession officially ended in June 2009.

Earlier this year, federal jobless benefits were cut and most states have pared back their benefits as well.

Even though President Barack Obama and congressional Democrats want another year of federal benefits as part of a deal to avert the fiscal cliff, the $30 billion price tag is a major sticking point for Republicans, who have made trimming the federal spending their main goal.

If no extension is reached by year’s end, Winn, 57, would miss out on nearly $3,000 in federal benefits she’s already been approved for. She’ll also have to raid her $7,000 401(k) retirement fund to continue paying her health insurance premiums and mobile-home rental space. Many of Winn’s former co-workers at the now-bankrupt printing company face the same predicament after losing their jobs.

“We’ve worked our butts off. We feel betrayed,” Winn said of Congress’ failure to make jobless benefits a major focus of the fiscal cliff negotiations.

“Congress is looking for the easiest way to get what they want,” she said. “Me and my co-workers don’t trust them to do what’s best for the people. … It’s about politics instead of what’s in the nation’s best interest.”

Unemployment insurance kept 2.3 million people out of poverty last year, including more than 620,000 children, according to the Congressional Research Service. On Tuesday, jobless workers from across the country jammed the halls of Congress and pressed their case to extend benefits yet again.

A tearful Karen Duckett of Laurel, Md., told lawmakers she’d lost her job as an environmental services administrator a year ago and hasn’t found work since. Her extended benefits expire in two weeks. A breast cancer survivor who lives with her 14-year-old grandson, Duckett, 51, fears for her family’s future unless Congress acts.

“I can’t even imagine how Congress can even think, possibly, that this is OK,” Duckett said. “We sent you all to Washington and we need your help. I know that you all can’t possibly let this happen to us.”

Dan Haney, 54, of Philadelphia lost his customer service job at a mail order pharmacy that outsourced his position overseas. Haney has found only temporary work since then and thinks that his age is working against him. Choking back tears, Haney said his 26 weeks of state benefits would expire Wednesday, leaving him with no stable income.

“It’s hard to imagine that Congress would willfully allow such a heartless outcome for so many of their fellow citizens who, like me, just need some more time to find new jobs,” Haney said.

Barbara Laxdal of Bellevue, Wash., was a secretary at a private school that closed its doors for good in June due to declining enrollment. Laxdal already had taken a cut in pay and hours when the school administrator called her into the office for a discussion.

“I just kind of looked at her and she looked at me and said, ‘We’re letting you go.’ And that was it. It was pretty rough to take after 17 years,” Laxdal said.

“My cliff is coming in three weeks, and then I have to be doing something or find more income. I may have to let the insurance go, and that’s the last thing I want to do.”

On average, U.S. workers receive only $291 a week in federal benefits, but the money has a strong stimulative effect on the economy, because it gets spent almost immediately. A November report by the Congressional Budget Office found that extending the program through 2013 would create 300,000 jobs.

But in a November blog post, James Sherk, a labor economics expert at the conservative Heritage Foundation, said the CBO estimate was inflated because it assumed that every dollar of benefits was spent. In fact, Sherk wrote, recipients “draw down their savings at a slower rate than those without benefits.”

The CBO also cautioned that extended benefits are a disincentive for people to find work immediately.

The program might continue for up to 14 weeks under several partial funding plans that cost from $3 billion to $14 billion, according to a CBO analysis. But labor advocates and Senate Democrats are pushing for a one-year extension.

“I think it’s heartless to talk about a further reduction,” said Rep. Sander Levin, D-Mich., the ranking member of the House Ways and Means Committee.

South of Greensboro, N.C., in rural Randolph County, 51-year-old Clyde Lance just started a new job this week, with only weeks remaining on his jobless benefits. After being unemployed for seven weeks, Lance had seven interviews in six weeks and got the job he wanted most, as a technician for a nonprofit robotics training center.

Along with a stable income, the new position will provide health care for his ill wife and him.

Lance said he thought that members of Congress would vote differently if they spent some time with struggling families.

“Go live with a family that lives on unemployment (benefits) and see how it goes when that disappears. It’s nearly impossible for somebody in a nice stable job for years to relate to it,” Lance said.

As for people putting their faith in another extension, Lance is hopeful, but not optimistic.

“The government is a machine. They can turn that money off anytime they want. Every now and then we need to get woken up to the fact that the government don’t love you. Your mother does.”

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