Unemployment Benefits Keeping Millions Out Of Poverty, But Congress Set To Let Them Expire

Today, the House of Representatives failed to pass a extension of unemployment benefits. The bill was brought up under suspension of the House rules, which meant it needed a 2/3rds majority to pass. 11 Democrats and 143 Republicans voted against the extension.

Even if the House had passed the extension three-month extension, which was far too short to be acceptable anyway, the Senate has not scheduled time to hold its own vote. “At this point it’s not been scheduled,” said Sen. Jack Reed (D-RI). “We’re trying to make a case that there be action but at this point I can’t point to a specific time it will come up for a vote this week.”

If allowed to expire on schedule at the end of the month, 2.5 million Americans will lose their unemployment benefits, right in the midst of the holiday season. In the past 40 years, the U.S. has not allowed extended benefits to expire with unemployment above 7.2 percent, so having them lapse at 9.6 percent would easily set a new record.

Unemployment benefits are providing a vital lifeline for millions of Americans, at a time when there are five unemployed persons for every job opening. There are so few job openings, in fact, that even if every open position in the country were filled, four out of five unemployed workers would still be out of work.


Not only that, but according to a new report by the non-partisan Congressional Budget Office, extended UI benefits kept the poverty rate more than a full point below where it would have been otherwise:

Without the financial support provided to families by UI benefits and under an assumption of no change in employment or other sources of income associated with the absence of that support, the poverty rate and related indicators of financial hardship would have been higher in 2009 than they actually were. For instance, in 2009 the poverty rate was 14.3 percent, whereas without UI benefits and with no behavioral responses taken into account, it would have been 15.4 percent.

In September, the Cenusu Bureau reported that 3.3 million people were kept out of poverty due to unemployment benefits. Providing UI benefits is also the most stimulative step that the government can take, as they create nearly two dollars in economic activity for every dollar spent.

It’s quite absurd that Congress is having an intense discussion over whether or not to spend $830 billion on tax cuts for the richest two percent of Americans, but can’t summon the will to extend unemployment benefits while millions of Americans cope with the lingering effects of the Great Recession. Priorities!