The biggest fiscal changes aren’t scheduled to happen until December. But this week heralds the beginning of the end for federal unemployment benefits.
States typically provide 26 weeks of unemployment benefits. But four years ago, as the economy began taking a nose dive, Congress began providing additional federal support to pay for more weeks of unemployment insurance after state benefits run out. Since then, it’s reauthorized versions of two federal UI programs — the Emergency Unemployment Compensation (EUC) program and the Extended Benefits program — on 10 separate occasions, according to George Wentworth, a staff attorney for the National Employment Law Project. The most recent extension happened in February as part of the bipartisan deal on payroll tax cuts.
But now both of those federal programs are scheduled to phase out, as NELP explains in a new analysis paper. As of July 1, anyone who has lost their job won’t benefit from the additional weeks of federal unemployment insurance if they still haven’t found a job by Dec. 31 — when their 26 weeks of state unemployment benefits run out.
Meanwhile, those who receive the extended federal aid will be cut off at various points throughout the year. The Extended Benefits program will be phased out entirely by August, “with more than 500,000 workers having been cut off benefits since the beginning of the year,” NELP says in the analysis. The EUC program is scheduled to expire by December, taking two million more Americans off the federal unemployment rolls between Christmas and New Year’s unless Congress acts.
But while their benefits are slated to be cut, Americans’ jobs prospects aren’t expected to look much better. Economists expected the unemployment rate in December 2012 to be 8.0 percent, according to a new survey by the Philadelphia Fed — just a touch below the current 8.1 percent. So add unemployment insurance to laundry list of issues that will be at the heart of Congress’ fiscal cliff negotiations.