By TARA CLARKE
December 27, 2013
Today, 1.3 million long-term unemployed workers sit restlessly in Congress’ palm. They will be left without federal unemployment benefits just three days after Christmas if Washington fails to rework the budget deal to extend the Emergency Unemployment Compensation Program(EUC).
The EUC extends federal benefits to people who are unemployed when state benefits run out. Typically, states provide benefits to unemployed workers for up to six months. But during the 2008 subprime crisis, President George W. Bush established the EUC to stem the damage, as joblessness hit a peak of 10% in 2009. Lawmakers have extended the program 11 times over the past five years. Some people have received benefits for 99 weeks, and the EUC has doled out $225 billion in benefits over its lifespan.
But fresh signs of economic recovery, including the latest jobs report and now a U.S. Federal Reserve taper, finally point to the program’s close. Government-reported analyses state that businesses have created almost 200,000 jobs total over the last four months, the economy grew faster than anticipated in the third quarter, and the majority of economists are forecasting stronger growth in 2014.
In light of this favorable data, Democrats agreed to cut the program during this month’s negotiations over the federal budget. The budget deal builds in a $22 billion deficit reductionthat cuts $85 billion over two years, while allowing a $63 billion increase in spending caps. Were the EUC extended again, it would cost around $25.7 billion for one year, according to the Congressional Budget Office – and would thereby totally undermine the budget deal’s savings.