NEW: Reed, Whitehouse Seek to Preserve Unemployment Insurance
Monday, December 03, 2012
In an effort to boost the economy and prevent 2 million Americans from abruptly losing their jobless benefits at the end of the year, U.S. Senators Jack Reed and Sheldon Whitehouse as well as 40 of their Senate colleagues are strongly urging the preservation of federal unemployment insurance (UI) programs.
Reed says preserving unemployment insurance through 2013 will spur consumer demand and help local businesses, states, and struggling families; and warns that cutting off UI could severely hinder economic recovery and harm the middle-class.
The 42 U.S. Senators sent a letter to Senate leadership, noting: “We are writing to express our deep concern regarding the expiration of federal support for unemployment insurance at the end of the year. Unemployment insurance is an essential component of our ongoing economic recovery and provides support to workers and their families who have been laid off through no fault of their own as they search for work.”
Despite recent declines in the unemployment rate, the letter notes that more than 12 million Americans are still looking for work, and that there are approximately 3.4 unemployed jobseekers for every available job opening. The federal UI program requires workers to search for jobs, and a recent study from Congress’ Joint Economic Committee (JEC) shows that “beneficiaries of federal UI benefits have spent more time searching for work than those who were ineligible for UI benefits.”
“Unemployment benefits have a proven economic impact. They help individuals, businesses, and states and provide a major economic boost to the national economy as well,” said Reed. “I’d like to thank my colleagues for signing this letter and working to strengthen our economy. The number one thing businesses need to create jobs is an increase in consumer demand. Extending unemployment insurance helps sustain demand for local businesses during economic downturns by helping people pay their bills while they look for a new job. Cutting off UI now will sap buying power from this economy and could severely hinder the recovery.”
Last month, the Economic Policy Institute found that the U.S. economy would save about 400,000 jobs if federal jobless benefits are continued through 2013.
If Congress fails to act by the end of the year, approximately 2 million Americans – including almost 9,000 Rhode Islanders -- could stop receiving their weekly unemployment checks, no matter where they are in the federal program. Starting January 1, it will be back to a system of up to 26 weeks of jobless benefits, well below the 99 weeks of assistance Americans were eligible for at the height of the recession.
Additionally, by mid-April, another 1 million Americans will exhaust those 26 weeks of state benefits and will not be able to sign up for the federal program, according to the National Employment Law Project.
Congress already trimmed the program earlier this year, reducing the number of weeks of eligibility and covering an estimated 500,000 fewer Americans.
“We need to work together to create more job opportunities. But until the labor market improves, preserving UI is one of the most cost effective ways to help struggling families and businesses in our communities,” concluded Reed.