Millions face cutoff: No Happy New Year for unemployed
Federal Extended Unemployment Compensation (EUC) benefits expire as Republicans block vote
San José, CA – While people around the world are celebrating the New Year, 1.3 million long-term unemployed Americans will be facing an immediate cut-off of their Federal Extended Unemployment Compensation (EUC) benefits. In addition, an estimated 1.9 million unemployed workers will lose their benefits as their six months of state Unemployment Insurance (UI) runs out in the first half of 2014. These cuts came about as Republicans in both the House and Senate opposed votes to extend the benefits.
At the end of 2013, only 41% of the unemployed were getting unemployment insurance from the states or the federal government. This was down more than a third from the 65% of unemployed who were getting unemployment benefits in 2010. With the end of the federal extended unemployment benefits, only 26% of the unemployed will be getting benefits in the new year. This is a record low percentage, dating back to 1950.
The all-time low in unemployment insurance benefits coverage of the unemployed is part of a larger pattern of cuts in government aid to those in need. Since the passage in 2011 of the ‘Budget Control Act’ the payroll tax cut has ended, food stamps have been cut, social programs are being cut under the sequestration process and now the long-term unemployed have been cut off from UI benefits. All of these tax increases and spending cuts have been a drag on the economy, with the cut in federal extended benefits estimated to cost some 200,000 jobs over the course of 2014.
The Republicans are demanding that the cost of extended unemployment benefits, about $25 billion for the next year, or less than 1% of the total federal budget, be matched by cuts in other programs. However there was no such demand when the federal government bailed out General Motors, which cost over $10 billion to the government. With the end of the bailout, General Motors is now talking about raising their managers’ salaries and paying out more to their shareholders in the form of higher dividends. This is just another example of how the government has bailed out the banks and big corporations during the financial crisis, but did little and is now doing even less for the unemployed and troubled home buyers.