Tag Archives: Emergency Unemployment Compensation

Will Emergency Unemployment Compensation Benefits Expire?

unemployedThere was a sobering article in the New York Times this morning, “Extension of Benefits for Jobless Set to End.” Since the economy tanked in 2008, the federal government has made additional unemployment benefits available through the Emergency Unemployment Compensation (EUC) program. This program supplements the benefits available in each state to provide additional weeks of compensation.

Today, most states provide a maximum of 26 weeks of unemployment benefits to those who lose their jobs through no fault of their own. (A few states — including Florida, Georgia, and North Carolina — have cut back and offer fewer than 26 weeks.) A permanent federal program, in place since 1970, offers extended benefits in states where the unemployment rate is both high and increasing. Although a number of states still have relatively high unemployment rates, those rates have been high for a while now. As a result, these states don’t have increasing unemployment rates. Therefore, according to the Center on Budget and Policy Priorities (CBPP), no state currently provides benefits under the extended benefit program.

That leaves the EUC program as the only source of extended benefits for the long-term unemployed. The EUC program offers 14 to 47 additional weeks of benefits. (The number of weeks depends on the state’s unemployment rate; there’s an up-to-date chart of each state’s benefit offerings at “How Many Weeks of Unemployment Compensation Are Available?” at the CBPP’s website.) However, the entire EUC program is set to expire at the end of the year.

Congress has had to vote on this program a number of times in the past five years, and each time it has extended the program. As you may recall, however, this has been a particularly rough year for partisan fights over government funding. Congress still has to come up with a budget, as it agreed to do in ending the shutdown. As a result, the Times predicts that Congress is unlikely to continue the EUC program past the end of the year, with the result that 1.3 million people will immediately lose access to these additional benefits.

No More 99ers: Federal Extensions of Unemployment Benefits Shortened

When unemployment rates are high, Congress has generally responded by passing legislation to supplement state unemployment insurance benefits. In keeping with this tradition, Congress passed the Emergency Unemployment Compensation (EUC) program in 2008 to provide additional weeks of eligibility to workers who had lost their jobs in the recession. Over time, the benefits available from state governments, plus four “tiers” of EUC, plus benefits available through the Extended Benefits program (a joint federal-state extension) added up to a potential total of 99 weeks of benefits. Some of the extra money available from Congress was dependent on the unemployment rate, so workers in some states weren’t eligible for the full 99 weeks. But many were, and some of the long-term unemployed took to calling themselves “the 99ers,” even before the Occupy movement made 99 the magic number dividing the haves and the have-nots.

Well, that number is changing. When Congress reauthorized the unemployment extension programs in February, it phased in a couple of changes intended to restrict benefits eligibility. First, it set higher unemployment rate thresholds a state must meet before qualifying for the benefits extension. And second, it decreased the total months of benefits available. Starting at the beginning of this month, those changes are taking effect.

Once unemployed workers have used up their state benefits (which last 26 weeks in most states, although a handful of states have cut back on this number too), the tiers of the EUC program become available as follows:

  • Tier 1: 20 weeks of benefits until September 2012; 14 weeks thereafter
  • Tier 2: 14 weeks of benefits, but only if the state unemployment rate is at least 6% (this trigger is new, beginning in June 2012)
  • Tier 3: 13 weeks of benefits until September 2012; nine weeks thereafter. This Tier is available only if state unemployment is at least 7% (this trigger has increased from the former requirement).
  • Tier 4: Six weeks of benefits until September 2012; ten weeks thereafter. The trigger for this Tier has been increased to 9%.

The extended benefits program offers an additional 13 to 20 weeks of benefits, based on the state unemployment rate. However, most states no longer qualify. The National Employment Law Project estimates that no states will qualify for extended benefits by September of 2012. The upshot is that by September of 2012, the maximum possible benefits available will drop by six weeks, to 93. Because no states are projected to continue qualifying for extended benefits, however, the true maximum will be 73 weeks — and that’s only in states whose unemployment rates remain quite high. Already, some states have stopped qualifying for Tier 4 benefits based on the trigger rate.

And that’s before we reach what has come to be known as the “financial cliff” at the end of the year. That’s when all federal extensions to unemployment are set to expire, along with the Bush-era tax cuts, and those automatic spending cuts Congress enacted to force itself to reach a budget agreement are set to take effect. If Congress doesn’t act on the unemployment piece, benefits will revert to the 26 weeks or less available from state governments. Ouch.