Jobless workers will face an unpleasant shock at the end of the year: More than 1.3 million out-of-work Americans will lose their unemployment insurance on Dec. 28 unless Congress extends an emergency aid program that's set to expire.
The ranking member of the House Ways and Means Committee plans to introduce a bill on Wednesday to extend the federally funded Emergency Unemployment Compensation program for another year. The cost? About $25.2 billion.
If the program isn't extended, then the maximum amount of time that states can provide unemployment insurance will drop from 73 weeks down to 26 weeks. Some 1.3 million jobless workers will lose their unemployment insurance that January, and hundreds of thousands more will see benefits cut off in the months thereafter. (The average benefit is roughly $300 per week, though it varies.)
I talked to Levin by phone about his bill and why he thinks Congress should talk to more unemployed workers.
Brad Plumer: How did we get to a point where 1.3 million Americans are going to lose their unemployment benefits all of the sudden?
Sander Levin: It's important to note this isn't a cut. 1.3 million people will lose their entire unemployment insurance a few days after Christmas. It will vanish.
In previous years we've seen a slow phase-out in benefits. That's not the case this year. This is different, this is a total cutoff, and it will be more difficult for people to stay on their feet, to pay for food, to pay their bills. This is an immediate cutoff. In past cases benefits were phased out.
BP: Now the background here is that Congress expanded the unemployment program dramatically in 2008, but it's been shrinking in recent years. How did that happen?
SL: Well, as you know we have battled over that. According to the Congressional Research Service, the average number of weeks of federal benefits has dropped by more than one-third in the last two years. The average duration of federal benefits is now 28 weeks. So there's already been a curtailment of the duration of the program.
I was on the conference committee where we fought over this [in 2012]. Republicans insisted on a shorter duration. So as part of that compromise, the maximum number of weeks dropped from 99 down to 73 in some states. And some states like Michigan have reduced their state programs to 20.
BP: Why is this a bad time to cut benefits? We've seen a slow but steady recovery in recent years. At some point we should scale back, right?
SL: There are a couple of points here. Number one is that the job loss in this recession was much any of the previous ones since the Great Depression. And today we're still with 1.5 million fewer jobs than when the recession started. That's historic. I've got some charts here.
But then the second important point is that the percentage of long-term unemployed, those unemployed over 27 weeks is also historic since the Great Depression. About 36 percent of the unemployed have been unemployed for more than six months.
So you have a far deeper recession, a longer recession in terms of job recovery, and you have therefore huge numbers of people unemployed for over six months.
BP: And so the argument is that there are still millions of people who can't get jobs — who still need financial support?
SL: I met with a dozen or so people in Michigan who had been unemployed for more than 26 weeks. These are people from various walks of life, many of them are in their 40s and 50s. And they feel that it’s very difficult to get work. Several of them told me they don't put any references, any dates on their resumes, because it would tip off employers about their age.
So you have a crisis here. But the expiration will also have a real impact on the economy. The Economic Policy Institute has said the failure to extend the program would cost 310,000 jobs.
BP: And now what would your bill do?
SL: We're going to file it tomorrow. I'm introducing it with Sen. Jack Reed [D-R.I.] The bill will extend the unemployment insurance program for a year in its present form.
BP: Have you seen much interest from other lawmakers?
SL: I think there's a stalemate here. I know there is strong interest among House Democrats, and among Senate Democrats. We’re also sending letters to the conferees, at least the leadership of the budget conference committee. And my fervent hope is that when [lawmakers] go home this Thursday or Friday, they'll do what I did and talk to the unemployed.
BP: Do you have a sense of whether lawmakers spend a lot of time talking to unemployed constituents?
SL: A problem is that it's hard to find them, you can’t get lists under the privacy laws. You have to go to offices where they come in periodically and talk with them. Twenty years ago people would come in to offices to pick up a check and it was easy to find the unemployed.
But now there are large number of people who are invisible. And so we're trying to make it more visible, so we’re using social media again, and we’re getting a number of people who are doing this on Facebook. We did that a year ago.
And if I might say so, I also think it’s important to the media to go out and talk to the unemployed and get their stories. And it's possible to do that, you have to talk to the workforce, it depends on the state. I just talked back home to the head of the workforce office, and he was able to gather a dozen people who told their stories. And if my colleagues would do that, this bill will pass for sure.
BP: What sort of counterarguments have you encountered on this issue? Some people have argued that unemployment benefits actually provide a disincentive to finding a job.
SL: Yeah, the disincentive argument often gets made. But the literature, studies don’t support those arguments. Like any program, you can find exceptions. But the vast majority of people here are people looking for work, who want a job. I've met people who are crying and saying I want work, I can't find it.
BP: And the estimates I've seen say this bill will cost $25.2 billion. Is that something that you'll have to offset with spending cuts elsewhere to get this passed?
SL: Historically by and large, these programs have not been funded that way. In part because they’re economic emergency programs. And also the failure to extend them hurts job growth. There are a few exceptions, but overall these programs have been considered part of emergency spending. And for these 1.3 million people and then even more in the next six months, this is an emergency.
BP: Last year, unemployment insurance got extended as part of the fiscal cliff deal. There's not a cliff this year. Is there a harder path for getting this bill passed?
SL: There is the budget conference, so there is a clear vehicle here. And it should be used. I think when my colleagues look at the facts, and talk to unemployed people, that that combination mandates action. My colleagues need to look at these stark numbers. But also they need to, when they go back home, talk to people.
BP: Have you seen any sign from the budget committee that they're planning to take this up?
SL: My hope is that they will make unemployment insurance one of the key parts of their work. That and [the Medicare "doc fix"] are issues that must be handled this year.
It’s been raised. I’m assured by both Patty Murray and Chris van Hollen that it will be pursued, and we’ve now reached out to Republicans to see if we can garner bipartisan support. We don't have a response yet, but discussions are underway. If we can’t act on a bipartisan basis on this challenge, then we really are just at a brick wall stalemate. This is a test of whether this institution has the ability to respond to both human needs and overall economic needs. It's that stark.
Interview has been lightly edited for length and clarity.