Without an extension, two million unemployed workers will lose their federal unemployment insurance benefits at year’s end. Congress has never allowed unemployment benefits to expire with the unemployment rate as high as it is today.
President Obama’s plan to avert the so-called “fiscal cliff” included an extension of unemployment benefits. And now Senate Democrats are hopping on board, according to The Hill:
A majority of Senate Democrats are backing a yearlong extension of federal unemployment benefits that are set to expire at the end of the year.
Sen. Jack Reed (R.I.) and 41 of his 53 colleagues are lining up behind a proposal to extend the federal benefits program through 2013, according to a letter sent to Senate leaders on Monday.
“We are writing to express our deep concern regarding the expiration of federal support for unemployment insurance at the end of the year,” they wrote.
“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.”
Research has shown that unemployment benefits — in addition to boosting demand in the economy and thus creating jobs — actually increase the number of people that become reemployed, “because they motivated people to not exit the labor force and stop looking for work.” The San Francisco Federal Reserve has found that workers who receive unemployment benefits stay do not stay unemployed longer than workers who receive no benefits.
In addition to those millions facing the prospect of losing their benefits, half of Americans who are eligible for unemployment insurance never even apply.