Federal government extends artificial poverty, denies benefits for jobless

"Jobless face loss of federal benefit extension"  
2013-12-14 by Kathleen Pender for "San Francisco Chronicle" [http://www.sfgate.com/business/networth/article/Jobless-face-loss-of-federal-benefit-extension-5065324.php]:
The House of Representatives left work for 2013 without extending federal unemployment benefits, which means that all of the 1.3 million people receiving them face a hard cutoff at the end of this year.
An additional 1.9 million people nationwide receiving regular state unemployment benefits won't get any further payments after their state claim runs out next year.
Many thought the budget deal announced Tuesday would include an extension, but it did not. Congress could restore federal benefits early next year, as it did early this year after they expired at the end of 2012. But with the economy in better shape now, there's no guarantee that will happen.
In normal economic times, people are entitled only to regular state unemployment benefits, which are funded by a tax on employers and last up to 26 weeks in most states.
During recessions, Congress typically approves additional weeks of benefits, gratis the federal government. These benefits start after a person has run out of state benefits but is still looking for work.
The current federal extended benefit program started in 2008 and has been renewed many times. At one point it provided up to 73 weeks, which on top of 26 weeks of state benefits totaled a maximum of 99 weeks in states with high unemployment.
But Congress has been reducing federal benefits and no state has been eligible for 99 weeks since last year.
The maximum state-plus-federal benefit in most states now ranges from 40 to 63 weeks. (California is at 63 weeks.)
The maximum in each state depends on its rules and unemployment rate.
The federal program provides up to 47 weeks but only three states - Illinois, Nevada and Rhode Island - qualify for that much. Combined with state benefits, the maximum there is 73 weeks.

No federal benefits -
At the opposite extreme is North Carolina, where the jobless can receive up to 19 weeks of state benefits and no federal benefits, even though its unemployment rate is 8 percent. A cut in state payments this year triggered the loss of federal benefits.
In California, more than 220,000 people are receiving federal benefits and face a hard cutoff. They make up about one-third of the 617,000 people on unemployment, according to the California Employment Development Department.
Mike McGuire of San Leandro, whose state benefits run out this month, doesn't know what he will do if benefits are not extended next year.
"There are no hot leads," says McGuire, who once taught economics at a community college but has been working on and off - mostly in clerical jobs - since his last full-time job, as a copy editor, ended in 2006.

Push for extension -
"All administrative jobs I see seem to be temporary or permanent part-time with a vague promise they will grow into full time. And they seem to have hours that would keep you from getting any other job," says McGuire, 58.
Senate Majority Leader Harry Reid says he will push for an extension in January, but he'll have to overcome opposition from folks like Sen. Rand Paul, R-Ky.
 On Fox News Sunday last week, Paul said, "I do support unemployment benefits for the 26 weeks that they're paid for. If you extend it beyond that, you do a disservice to these workers." He cited a study showing that "nearly 100 percent" of employers would rather hire someone out of work four weeks than 99 weeks.
Although the jobless rate fell to a five-year low of 7 percent in November, it is still higher than it normally is when Congress withdraws extended benefits. Over the past 60 years, the highest unemployment rate at which they were killed was 7.2 percent in March 1985.
The long-term unemployment rate, however, is at least twice as high as it was the last seven times Congress killed federal benefits. The long-term rate is the percentage of people in the labor force who have been out of work for more than 26 weeks.
"If we let them expire now, it would be at a time of historic long-term unemployment," says Michael Strain, a resident scholar with the conservative American Enterprise Institute who favors extending the benefits.

Looking for work -
He points out that as long as people are getting benefits, they must look for work. Paying benefits "keeps them attached to the labor force," he says.
Some research has shown that increasing the duration of unemployment benefits tends to increase the unemployment rate, but usually by a small amount.
The benefits are also expensive. Extending them for a year would cost about $25 billion.
Heidi Shierholz, a labor economist with the Economic Policy Institute, says that most of that money goes directly back into the economy, providing an important stimulus.
Strain's colleague at the American Enterprise Institute, research fellow Alex Brill, says it's time to let extended benefits expire.
"More than $200 billion has been spent on benefits," most of it ineffectively, he says. "I don't think the program is working well," especially for the long-term unemployed.

Could be better spent -
Brill thinks the money could be better spent on retraining and relocation assistance so people can move to better job markets. "We need radically different policies," he says.
That may be, but it won't help people on the verge of losing an economic lifeline, says Maurice Emsellem of the National Employment Law Project.
"It's not like this issue is going away," he says, predicting that lawmakers will get an earful from constituents over the holidays. "They cannot walk away from a million unemployed workers and their families."