Budget deal is bad news for long-term unemployed

By Steve Spires

The federal budget deal announced this week is a welcome reminder that bipartisan compromise is still possible on Capitol Hill. The agreement averts a government shutdown, undoes some of the indiscriminate “sequestration” budget cuts and continues to reduce the budget deficit.

But for those who’ve been hardest hit by the Great Recession — the 1.3 million long-term unemployed Americans who are receiving federal jobless aid — the deal amounts to a lump of coal in their Christmas stocking. That’s because congressional negotiators failed to renew federal Emergency Unemployment Compensation (EUC), even though the economic recovery remains stubbornly slow and there are still nearly three job seekers for every job opening.

If long-term benefits are not extended by the end of the year, benefits will be cut off just a few days after Christmas. Without action, an estimated 7,000 Louisianans could lose benefits by the end of December, and 30,400 Louisianans will lose access to benefits by the end of 2014.

It would mark the first time ever that Congress has allowed long-term unemployment benefits to expire in the aftermath of a recession when unemployment remains at such high levels. Louisiana’s unemployment rate was 6.5 percent in October, down from 7 percent over the summer.

Last year, nearly 2 in 5 unemployed Louisiana workers had been out of a job for 27 weeks or more, almost twice the rate in 2008.

The EUC program is not meant to be permanent, but is a temporary measure that Congress has used to respond to the Great Recession and slow economic recovery. Since the beginning of 2008, nearly 175,000 Louisianans have received EUC benefits at one point or another.

The average weekly benefit is a modest $207, an amount that, on average, replaces less than 40 percent of a worker’s prior earnings. Recipients must prove that they are searching for work or enroll in job training to be eligible.

Federal EUC benefits offer a vital source of income for many Louisiana families and are likely to be spent on immediate needs such as rent, groceries, clothes and car repairs. That means jobless aid also helps support jobs in local economies across the state.

Cancelling benefits now, when unemployment remains high, would both hurt Louisiana’s economy and increase hardship for people who are willing to work, but simply haven’t found a job. Congress should act to renew EUC before adjourning for its Christmas vacation.

They include details about safety-net programs like Medicaid, tax credits for low-income workers and educational scholarships and help promote a better understanding of how safety-net programs affect different communities across our state.
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