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Groups Urge Congress to Extend Unemployment Benefits

December 7, 2009
Related Topics: Financial Impact, Benefit Design and Communication, Latest News
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One million workers will lose their unemployment benefits in January unless Congress acts soon to extend initiatives contained in last winter’s economic recovery legislation, according to a new report.

The Center for American Progress and the National Employment Law Project state in a paper released Monday, December 7, that the number of unemployed Americans becoming ineligible for safety-net programs will rise to 3.2 million by March.

The stimulus bill that President Barack Obama signed in February provided up to 53 weeks of unemployment insurance and a nine-month subsidy funding 65 percent of COBRA benefits for laid-off workers. Normally, unemployment compensation is available for 26 weeks.

Congress added up to 20 more weeks of benefits in November. The problem is that it did not extend the end-of-the-year expiration for the program, according to experts.

With unemployment now at 10 percent and 15.4 million people out of work—5.7 million of them for more than six months—advocates urged Congress to renew the increased unemployment benefits through 2010 before its anticipated break on December 18.

Sandi Vito, secretary of the Pennsylvania Department of Labor & Industry, said that many in her state are long-term jobless and are having trouble covering their housing, health care and food costs.

“Extending these benefits is critical to unemployed people,” Vito said at a National Press Club event Monday. “It’s a moral imperative.”

Wade Henderson, president and CEO of the Leadership Conference on Civil Rights, said that Congress has “no higher priority right now.”

“The jobs crisis is the civil rights and human rights issue of the moment,” Henderson said.

The report by the advocacy groups states that the average monthly COBRA premium for a family insurance plan is $1,069. COBRA allows laid-off workers to continue on their company insurance plan.

The COBRA subsidy in the stimulus bill brings the payment down to $374. When it expires, the cost of continuing health coverage would eat up most of the monthly unemployment payments, which average $309 per week.

A study by Hewitt Associates of 200 large companies shows that the average COBRA enrollment rate jumped from 19 percent to 38 percent after the stimulus subsidy was enacted.

House and Senate bills have been introduced to reauthorize the COBRA subsidy. The Senate measure, written by Sens. Sherrod Brown, D-Ohio, and Bob Casey, D-Pennsylvania, would increase the subsidy from nine to 15 months and raise the amount of the premium covered by the government to 75 percent.

A bill introduced by Rep. Jim McDermott, D-Washington, would extend the expanded unemployment benefits to March 2011. A similar Senate bill has been introduced by Sen. Jack Reed, D-Rhode Island.

Christine Owens, executive director of the National Employment Law Project, said that congressional leaders have indicated they’re open to the idea of attaching benefits extension legislation to a government funding bill that must pass by the end of the year.

The measure has to cut through a huge roadblock—health care reform legislation that is currently consuming the Senate calendar.

“We think it actually can be done, can be done quickly and doesn’t interfere with doing health care,” Owens said.

Getting money into the hands of the unemployed will boost consumption, which produces $7 of every $10 of economic growth, said Heather Boushey, senior economist at the Center for American Progress.

“If we stop now, we risk stalling this nascent recovery,” Boushey said.

—Mark Schoeff Jr. 

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