White House Makes Case for Extending Unemployment Benefits

  • December 05, 2013
  • By Jake Grovum (2)
Job seekers at the annual 'Honor a Hero - Hire a Vet' job fair in Van Nuys, Calif., in October. The White House is urging Congress to continue extended unemployment benefits past a Dec. 28 end date. (Getty Images)

The White House is urging Congress to allow 1.3 million unemployed Americans who have been collecting extended jobless benefits to continue to receive them beyond a Dec. 28 end date.

In a report released Thursday, the Obama administration argued that a failure to continue the benefits might lead to the loss of an additional 240,000 jobs, since job seekers will have less money to pump into the economy. It also cited estimates from the Congressional Budget Office and JPMorgan Chase suggesting that ending the program would sap as much as .4 percentage points from the national GDP. Last year, 2.5 million Americans were lifted out of poverty by unemployment insurance benefits, according to the administration.

States with the largest numbers of people who have received extended unemployment benefits since 2008:

  1. California: 3,158,520
  2. New York: 1,735,848
  3. Florida: 1,566,719
  4. Penn.: 1,438,326
  5. Texas: 1,201,076
  6. Illinois: 1,117,929
  7. N.J.: 1,071,279
  8. N.C.: 1,058,734
  9. Michigan: 960,747
  10. Ohio: 790,103
Source: Department of Labor, White House report.

Normal unemployment benefits, which the federal and state governments pay for jointly, last for 26 weeks. In June 2008, President George W. Bush approved an extension of benefits, and during the depths of the recession, unemployed Americans could collect for as long as 99 weeks.

The median number of weeks now offered by states is 28 weeks, with the length of time determined by a state's unemployment rate. A total of 24 million Americans have received extended benefits since 2008.

In addition to the 1.3 million Americans who would lose their benefits on Dec. 28, 3.6 million more people will lose their benefits by the end of 2014 without an extension.

The unemployment rate remains high nationally and especially in some states, but the fight over unemployment benefits is playing out amid broader federal budget concerns and efforts to avert another government shutdown next month. As Democrats and Republicans feud over overall spending, there's been little optimism that the unemployment programs will ultimately be saved.

It also comes as some states have opted out of or pared back their own unemployment insurance offerings, enacting cuts some have called “historic and disturbing.”

The result is that a number of states now provide fewer weeks of jobless benefits than at any time since the creation of the program in 1935. In some of those states, the extended federal benefits have remained in place, sparing the jobless the immediate pain of losing their benefits. Without the federal extension, that would no longer be the case.

Extending the program would cost the federal government $25.7 billion over the course of 2014 and 2015, according to a Congressional Budget Office estimate released this week. It would also increase federal revenues by $500 million in the next decade, the CBO said.

The amounts of money paid under the extended unemployment program already have been cut by the automatic federal budget cuts known as sequestration. Depending on when a state implemented those reductions, the cuts shaved as much as 25 percent off jobless Americans' unemployment checks, which average about $300 per week.