WASHINGTON – A reported 6,240 people in Erie and Niagara counties stand to lose their extended unemployment benefits late this month unless Congress acts to renew the program, which was designed to give people more time to find work in tough times.
The Obama administration last week began a push to renew the extended unemployment benefits program, which has allowed some people to stay on unemployment for as long as 99 weeks – far longer than the typical 26 weeks mandated by law during better times.
The Obama administration makes the case that even though the unemployment rate in November fell to 7 percent – its lowest level in five years – it still remains historically high, meaning that it’s important to give people more time to search for jobs.
Congress has typically extended unemployment benefits beyond 26 weeks in the past when the jobless rate was higher than 6 percent, said Betsey Stevenson, a member of President Obama’s Council of Economic Advisers.
“This program is playing a very important role in keeping people out of poverty,” she said.
Rep. Chris Collins sees a downside, though, to the extended unemployment benefits program.
“It is a bit of a perverse incentive to stay home because, you know, you’re getting these payments,” the Clarence Republican said. “For a lot of folks, the incentive to really beat the bushes is when you say, ‘I’ve got bills to pay.’ ”
The debate over extending unemployment insurance again will most likely be resolved in bipartisan budget talks that aim to result in passage of legislation by the end of the year to prevent another partial shutdown of the government, which looms on Jan. 15 unless Congress acts.
So far, though, there’s no indication that a budget deal being drafted by House Budget Committee Chairman Paul D. Ryan, R-Wis., and Senate Budget Committee Chairwoman Patty Murray, D-Wash., would extend those benefits.
And if Congress doesn’t act, 1.3 million people nationwide will lose their benefits when the most recent extension expires Dec. 28.
About 100,700 of those people live in New York State, according to the state Department of Labor, which reported county-by-county numbers showing 4,970 people in Erie County and 1,270 in Niagara County at risk of losing their benefits. An additional 2,050 people are at risk of losing their benefits in the other six counties of Western New York.
To the Obama administration, that benefit cut in the midst of a recovering economy could hamper economic growth in 2014. Noting that unemployed people who lose their benefits will surely curtail their spending, the administration predicts that will weaken the economy to the point where an additional 240,000 people will lose their jobs next year.
That’s one reason that House Democrats, led by Minority Leader Nancy Pelosi of California, are insisting that any budget deal extend unemployment benefits.
“We are making a very clear statement that we cannot – cannot – support a budget agreement that does not include unemployment insurance in the budget or as a sidebar in order to move it all along,” Pelosi told reporters last week. “It would undermine who we are as a country; most importantly, it would strike at the heart of what you bring to America.”
Republicans countered with the fact that extending the benefits again would cost about $25 billion more, and at this point, there’s no way to pay for that extension in a pending budget deal where everything must be paid for within set limits without further adding to the nation’s debt.
“I don’t see much appetite on our side for continuing this extension of benefits,” Rep. Tom Cole, R-Okla., told the Associated Press, adding: “We need to go back to normal here at some point.”
Then again, House Speaker John A. Boehner, R-Ohio, indicated last week that he’s open to extending the unemployment program.
If the president “has a plan for extending unemployment benefits, I’d truly entertain taking a look at it,” Boehner said at a news conference.
Similarly, Rep. Tom Reed, R-Corning, said: “Neither the president nor the Senate has put together real proposals to extend this program. We will evaluate specifics of a proposal when we see them.”
Even some Democrats seem less than enthusiastic about extending the unemployment insurance program while saying that it has to be done.
Rep. Brian Higgins, D-Buffalo, said he supports extending the program because the economy is still not creating enough jobs. But when told that Collins said the program could become a perverse incentive for the unemployed to avoid looking for work, Higgins said: “I think there are certainly a lot of people who are desperately trying to find work, but there’s abuse in every system.”
Given that manufacturing today is less labor-intensive and that it often requires highly skilled workers, Higgins added: “We need to reform the unemployment insurance model to promote intensive skills development and economic self-sufficiency and independence.”