NEW YORK (MainStreet) — The White House inched closer Thursday to a final compromise with lawmakers who would ensure Bush-era tax cuts are extended for all income brackets this year, a deal that includes an extension of unemployment benefits for many Americans.
The deal has, in many ways, pitted President Obama’s administration against much of his liberal base, who would prefer to see tax cuts expire on the wealthiest households earning $250,000 or more a year. But in response to the pushback on this compromise, the president has tried to focus attention on two of the key benefits of the tentative plan: It would continue to give tax breaks to middle-class Americans, putting much needed money in their pockets, and it would also extend unemployment benefits for an additional 13 months, potentially stopping millions of jobless Americans from going without funds.
Earlier this week, we took a look at the first part of this claim, breaking down just how much the average American would actually save annually by having the tax cut extended. The answer is less than you’d think.
As for the unemployment benefits, this new proposal is a bit of mixed bag.
Prior to the recession, unemployed workers were entitled to receive up to 26 weeks worth of benefits, but as a result of the economic crisis and jobless rates lingering near 10%, Congress extended the time period for these benefits five separate times to a maximum of 99 weeks’ worth of jobless benefits.
But starting at the end of November, these extensions began to expire one by one. So, for example, those who finished collecting their initial 26 weeks of unemployment benefits in the week ending Nov. 20, or anytime since, are no longer entitled to any additional benefits. Likewise, those who have already received the maximum 99 weeks of unemployment have officially maxed out their benefit options.
The new tax cut proposal would effectively renew the jobless extensions that have already been passed for another 13 months, but it would not extend them beyond the current 99 week limit, according to the Employment Development Department, a government group that provides tips and information about the labor market.
That means, under the new plan, someone who has exceeded their initial 26 weeks of benefits would be able to continue collecting for an additional 73 weeks, which is certainly not insubstantial to the families who rely on those benefits to put food on the table. However, this extension would do nothing for the many Americans who have been unemployed for 99 weeks or longer.
As we reported earlier this month, there are now 6.5 million Americans who have been unemployed for at least six months, and more than 1 million others who have abandoned the job market altogether. According to the President’s Council of Economic Advisers, as many as 4 million of these unemployed citizens are expected to exceed the maximum benefits allotted within the next year.
Some have, of course, claimed in the past that there needs to be a shorter time limit for jobless benefits in order to keep workers from getting lazy and letting the government send them paychecks for years on end. Yet, the grim reality right now is that even with this most recent jobless benefit extension, millions more Americans will likely lose whatever modest amount of money they do get, which can only hurt the economy.
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