Unemployment Benefits Extension Passes Senate

NEW YORK (MainStreet) — In an unexpected move earlier today, the Senate voted to close debate on a bill that would extend unemployment benefits for long term jobless by up to three more months.

The Emergency Unemployment Compensation Extension Act provides states with the money necessary to extend their unemployment insurance past the traditional 27 week cutoff. Congress authorized the emergency funding in the wake of 2008's financial crisis, and renewed it annually until last month when lawmakers allowed the program to lapse. The current bill would resume that funding, although individual states can take as much or as little of the money as they please.

The cloture vote came as a surprise to most onlookers, who expected Republicans to remain united behind opposition to the bill. After last minute efforts by both Congressional Democrats and the White House, however, six Republicans joined with Democrats to close debate in a 60-37 vote. No Democrats voted against the extension, while all but two of the remaining Republicans did.

Today's vote only avoided a filibuster on the unemployment extension. The Senate will next have to pass a final version of its bill and send it to the House. Leadership hopes to hold the vote by the end of this week after possibly adding measures to pay for the law's $6.5 billion price tag.

President Barack Obama has thrown his support behind the legislation, saying that allowing unemployment insurance to lapse in a time of high unemployment "is wrong" and calling on Congress "to make things right."

If the Senate does pass a final version of this bill, it will next face a steep uphill battle with a Republican majority in the House. Majority Leader John Boehner has said that, while he is willing to consider extending the canceled program, any bill would have to include spending cuts to offset its cost. This is similar to the position of Senate Republicans. The current Democratic version does not include any mechanisms to pay for itself.

Other House Republicans debate the need for this extension at all. In an interview with Buzzfeed, Oklahoma Rep. Tom Cole expressed general skepticism about the bill, saying that the unemployment crisis has passed.

 

"You're always gonna have the argument that at some point people are losing benefits," he said. "But that's the point, it was meant to cope with an extraordinary situation. But that situation has been dealt with."

According to the Center on Budget and Policy Priorities failure to extend unemployment benefits will leave nearly 5 million Americans without a means of support by the end of 2014 and has already impacted well over a million.

"[The] long-term unemployed represent 2.6% of the labor force," the Center wrote in a December 11 report. "At 2.6%, the long-term unemployment rate is at least twice as high as when any of the emergency federal UI programs that policymakers enacted in each of the previous seven major recessions expired."

The Center also cautioned against over-reliance on the official unemployment rate, as it under represents the actual number of unemployed Americans. The official number only includes people who actively look for work. Most people, however, stop reporting their job search once unemployment benefits run out since they no longer have a reason to do so. This is why states like North Carolina have seen unemployment fall without offsetting gains to employment after cutting benefits: it changes the recording mechanism, not the labor market.

Other people who remain out of work for too long can drop out of the labor market altogether.

"Many of these people would like to work and, in a stronger labor market, they would likely have a job or at least be looking, but they are not looking actively enough to be counted as officially unemployed," the Center reported. "Their absence from the ranks of the officially unemployed keeps the unemployment rate lower than it otherwise would be."

—Written for MainStreet by Eric Reed, a freelance journalist who writes frequently on the subjects of career and travel. You can read more of his work at his website www.wanderinglawyer.com.

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