Still Time to Fix Lapse in Jobless Benefits

March 26, 2010 - 5:15 PM
Congress left for a two-week vacation Friday without extending jobless benefits for people who have been out of work for more than six months.
Washington (AP) - Congress left for a two-week vacation Friday without extending jobless benefits for people who have been out of work for more than six months.
 
But that may not be as bad as it sounds. The impact of the benefit cutoff will be limited, so long as lawmakers quickly fix the problem when they return next month. The same holds true for a lapse in authorization for generous health subsidies for the unemployed and for a 21 percent cut in Medicare payments to doctors.
 
Dropping the ball on jobless benefits doesn't put Congress in a flattering light. But unlike an episode three weeks ago, when Kentucky Republican Sen. Jim Bunning held up a nearly identical measure over deficit concerns, Democrats don't seem poised to reap political gain from this round of GOP obstruction.
 
The impasse means thousands of people will begin to lose jobless benefits when a current extension of unemployment insurance expires on April 5. In addition, a 65 percent subsidy for health insurance benefits for the unemployed under the COBRA program expires Wednesday.
 
The expiration of unemployment insurance means that people who have been out of a job for more than six months will gradually lose eligibility for additional weeks of benefits that are fully financed by the federal government. The first six months of unemployment benefits would not be affected, since they are the responsibility of the states.
 
But someone whose six-month state benefits are running out after April 5 won't be eligible for a new 20-week "tier" of federally financed benefits so long as the program has lapsed. A person already receiving such benefits won't see them run out until they apply for additional weeks.
 
That means perhaps one in 50 of the 11 million people now receiving unemployment checks would be affected in the first week of the benefits expiration, according to the National Employment Law Project. Almost 1 million people would see their benefits exhausted by the end of April.
 
The Democrats in control of Congress promise that any lost benefits will be made up for.
 
The more generous jobless aid started in 2008 and was extended through last year by the economic stimulus bill. With unemployment averaging almost 10 percent nationwide, Democrats and Republicans alike want to see the benefits extended. The most recent extension, passed earlier this month, was supposed to buy time for House-Senate negotiations on a yearlong extension.
 
It's a long-standing practice on Capitol Hill to pad the national debt to pay for emergency jobless benefits, and the long-term extension would do just that. But with the deficit projected at $1.5 trillion, Republicans are starting to balk. "I think you'll see a much greater commitment now to fiscal responsibility," said Jon Kyl of Arizona, the No. 2 Republican in the Senate.
 
For Democrats, the episode exposed rifts. Many Democrats say the unemployment benefits are an emergency and that financing them with tax revenue or budget cuts reduces their stimulative impact on the economy. But Democratic deficit hawks are sympathetic to the GOP's argument.