Unemployment checks to 2 million will stop without action
About 2 million Americans stand to lose their unemployment checks by the end of December after Congress failed to extend benefits Tuesday, threatening to crimp consumer spending in a fragile recovery and critical holiday shopping season.
A motion by Sen. Jack Reed, D-R.I., to pass an extension on a voice vote fell short.
“Taking away these benefits only places greater strain on out-of-work Americans already struggling to put food on the table especially during this holiday season,” said Sen. Max Baucus, D-Mont., author of a bill to extend the benefits for a year.
The National Employment Law Project (NELP) estimates extending benefits for a year would cost about $56 billion. But economists say they provide an outsized economic lift, because the unemployed spend cash on necessities rather than socking it away.
Economist Mark Zandi of Moody’s Analytics says every dollar spent on jobless aid yields a $1.60 benefit to the economy. If benefits are not restored, he says, holiday sales growth will be shaved by nearly a percentage point and fourth-quarter economic growth will be cut by 0.3 percentage point. A million jobs could be lost in the next year as a result, he says.
Construction worker Oral Mellinger, 55, of York, Pa., lost his house in September and would lose the trailer he rents if his $350-a-week unemployment check stops. “We would definitely be out on the street,” he says.
Congress extended benefits in the recession. Unemployed Americans typically get 26 weeks of benefits from states and up to 73 more weeks in federal aid.
About 800,000 Americans are slated to be cut off by the end of next week and another 1.2 million would lose benefits by the end of the month, NELP says.
Similar standoffs have occurred the past year, with lawmakers ultimately passing retroactive extensions.
But Republicans emboldened by their sweeping victories in last month’s elections are taking a tougher stance against expenditures that increase the deficit.
Larry Smar, a spokesman for Sen. Robert Casey, D-Pa., said the best hope for passage this month is for Democrats to insist on its inclusion in a bill that temporarily extends tax cuts for all Americans, including the wealthy.
By Paul Davidson
By TOM BREEN, Associated Press Tom Breen, Associated Press – Wed Dec 1, 4:57 pm ET
Source: USA TODAY
Holidays about survival as jobless benefits end
Shawn Slonsky’s children know by now not to give him Christmas lists filled with the latest gizmos. The 44-year-old union electrician is one of nearly 2 million Americans whose extended unemployment benefits will run out this month, making the holiday season less about celebration than survival.
“We’ll put up decorations, but we just don’t have the money for a Christmas tree,” Slonsky said.
Benefits that had been extended up to 99 weeks started running out Wednesday. Unless Congress approves a longer extension, the Labor Department estimates about 2 million people will be cut off by Christmas.
Support groups for the so-called 99ers have sprung up online, offering chances to vent along with tips on resumes and job interviews. Advocacy groups such as the National Employment Law Project have turned their plight into a rallying cry for Congress to extend jobless benefits.
Things used to be different for Slonsky, who lives in Massillon, Ohio. Before work dried up, he earned about $100,000 a year. He and his wife lived in a three-bedroom house where deer meandered through the backyard.
Then they lost their jobs. Their house went into foreclosure and they had to move in with his 73-year-old father. Now, Slonsky is dreading the holidays as his 99 weeks run out.
“It’s hard to be in a jovial mood all the time when you’ve got this storm cloud hanging over your head,” he said.
The average weekly unemployment benefit in the U.S. is $302.90, though it varies widely depending on how states calculate the payment. Because of supplemental state programs and other factors, it’s hard to know for sure who will lose their benefits at any given time.
Congressional opponents of extending the benefits beyond this month say fiscal responsibility should come first. Republicans in the House and Senate, along with a handful of conservative Democrats, say they’re open to extending benefits, but not if it means adding to the $13.8 trillion national debt.
U.S. Rep. Mike Pence, R-Ind., the No. 3 Republican in the House, said extended benefits must be paid for now, rather than later, if they’re going to win support from fiscal conservatives.
“The fact that we have to keep extending unemployment benefits shows that the economic policies of this administration have failed,” said Pence spokeswoman Courtney Kolb.
Labor Secretary Hilda Solis told The Associated Press on Wednesday that declining to extend the benefits would be a mistake for Congress.
“This is a bad way to start off the new, incoming season of new politicians that said that they wanted to make government work for people in a better way,” she said.
Even if Congress does lengthen benefits, cash assistance is at best a stopgap measure, said Carol Hardison, executive director of Crisis Assistance Ministry in Charlotte, N.C., which has seen 20,000 new clients since the Great Recession started in December 2007.
“We’re going to have to have a new conversation with the people who are still suffering, about the potentially drastic changes they’re going to have to make to stay out of the homeless shelter,” she said.
Forget Christmas presents. What the 99ers want most of all is what remains elusive in the worst economy in generations: a job.
“I am not searching for a job, I am begging for one,” said Felicia Robbins, 30, as she prepared to move out of a homeless shelter in Pensacola, Fla., where she and her five children have been living. She is using the last of her cash, about $500, to move into a small, unfurnished rental home.
Robbins lost her job as a juvenile justice worker in 2009 and her last $235 unemployment check will arrive Dec. 13. Her 10-year-old car isn’t running, and she walks each day to the local unemployment office to look for work.
Jeanne Reinman, 61, of Greenville, S.C., still has her house, but even that comes with a downside.
After losing her computer design job a year and a half ago, Reinman scraped by with her savings and a weekly $351 unemployment check. When her nest egg vanished in July, she started using her unemployment to pay off her mortgage and stopped paying her credit card bills. She recently informed a creditor she couldn’t make payments on a loan because her benefits were ending.
“I’m more concerned about trying to hang onto my house than paying you,” she told the creditor.
Ninety-nine weeks may seem like a long time to find a job. But even as the economy grows, jobs that vanished in the Great Recession have not returned. The private sector added about 159,000 jobs in October — half as many as needed to reduce the unemployment rate of 9.6 percent, which the Federal Reserve expects will hover around 9 percent for all of next year.
For people like JoAnn Sampson, decisions made by Congress can seem very distant. The former cart driver at U.S. Airways in Charlotte and her husband are both facing the end of unemployment benefits, and she can’t get so much as an entry-level job.
“When you try to apply for retail or fast food, they say ‘You’re overqualified,’ they say ‘We don’t pay that much money,’ they say, ‘You don’t want this job,'” she said.
Sampson counts her blessings: At least her two children, a teenager and a college student, are too old to expect much from Christmas this year.
Wayne Pittman has been telling his family not expect much for Christmas either.
The 46-year-old carpenter, along with his wife and 9-year-old son, have stopped going to movies and restaurants and buying new clothes. With his $297 weekly checks gone, holiday gifts are definitely out.
“It’s not in our budget,” Pittman said. “I have a little boy, and that’s kind of hard to explain to him. To try to let him know, certain things he’s not going to be getting.”
This report includes contributions from Associated Press writers Meg Kinnard, in Columbia, S.C.; Ray Henry, in Atlanta; Melissa Nelson, in Pensacola, Fla.; Lucas L. Johnson II in Nashville, Tenn.; Mark Hamrick in Washington; and Jeannie Nuss in Columbus, Ohio.
By TOM BREEN, Associated Press Tom Breen, Associated Press – Wed Dec 1, 4:57 pm ET