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As Congress Votes on Unemployment Insurance Extension, Deeper Problems Remain

Congress is expected to reinstate extended unemployment benefits, but state unemployment trust funds are still in a shambles.

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Unemployed attendees search for jobs at a National Career Fair at the Airport Radisson Hotel in Los Angeles on July 19, 2010. (Mark Ralston/AFP/Getty Images)

Members of Congress are back from recess, and now that they’ve traded in their flip-flops for sensible shoes, their first order of business will likely be voting on whether to extend unemployment benefits for more than 10 million Americans who are in imminent danger of losing their benefits.

As part of our ongoing effort to cover the crisis in state unemployment insurance systems, we have been hearing from people in that very situation, like 61-year-old Kathairein Magdalena in Irving, Texas, who lost her unemployment benefits this month.

She has been cutting grass and cleaning houses for extra cash, but if her benefits are not reinstated, she writes, “I do not know what will happen to me. I have set aside money for utilities, etc. and I have rent money set aside that will carry me through August 20.

“After that, if I have not found work … I will be homeless.”

Congress’s delay in extending benefits is responsible for much of Magdalena’s distress, but for many other Americans, the roots of the problem lie in state decision-making.

Before the stimulus bill was passed last year, states paid for the first 26 weeks of unemployment insurance benefits. Then, depending on the state unemployment rate, states had the option of accepting a 50 percent federal subsidy to provide up to 53 more weeks of coverage.

The stimulus bill increased that subsidy for extended benefits to 100 percent, and added an extra 13 to 20 weeks of benefits, again based on each state’s unemployment rate. It also provided for a COBRA subsidy for jobless workers buying health insurance from their former employers.

If Congress does not act today to extend benefits, anyone like Magdalena who is receiving federal extended benefits will be without unemployment insurance. But states still have the option of offering up to 53 weeks past the standard 26 weeks with a 50 percent federal subsidy. Some are doing just that – like Washington – but most simply can’t afford it.

As we have been reporting, state unemployment insurance finances are in a shambles. Each state is responsible for maintaining its own unemployment trust fund, and many states had allowed their reserves to dwindle to dangerously low levels long before the Great Recession began.

So far states have borrowed more than $30 billion from the federal government just to keep paying benefit checks, and that interest-free lending is coming direct from U.S. taxpayers also.

To see how your state’s unemployment trust fund is faring, check out our Unemployment Insurance Tracker.

Look, it is simple. Business and jobs are now overseas. There is an abundance of 3rd world labor here. The rich powerful and well connected will have first dibs on any decent jobs. Your chance of getting a decent paying and desirable job has fallen to about zero.

If we don’t place ultra-high tariffs on imported goods and kick our illegal aliens, along with placing a very low cap on legal immigration, we are doomed. It is in the cards, read ‘em and weep! An extension of time, a block of more weeks of job-benefit-welfare, is simply pointless!  Don’t allow yourself to go from a Proud American Worker to a deplorable welfare recipient!

The bill was passed 60 - 40 thank you Senators Collins and Snowe. Since unemployment is over the 7.5% mark, this is Emergency spending and not subject to PAYGO. I find it strange that the Republicans have of late got fiscal faith. This same party wants to give the richest 2% a “tax break” which will cost us $678 Billion, no word on how the Republicans will pay for this ?

jeff little of troy ohio

July 20, 2010, 4:23 p.m.

We can pay for this by ending the iraq war and the failed war on drugs…

Winston Court

July 20, 2010, 6:16 p.m.

We can give up everything and pay most of the population welfare wages while the rich and powerful enjoy themselves in the land of plenty.  I am just going to be sick seeing a once proud America licking the boots of foreign nations and speaking chinese.

Helen A. Spalding

July 20, 2010, 6:19 p.m.

The Rs have decided to return to fiscal conservatism since they lost the election.  They didn’t care when their guy was giving away the surplus to the rich, or running up the deficit to pay for his wars.  Now, they’ve got religion, when Obama talks about spending to help working people, they yell about the deficit.  They are willing to spend money to kill people, but not to help them, except for the plutocracy.

The blame for all of our woes can be placed at the feet of two entities: Congress and We the People.  Congress is confused and trapped; confused because they don’t know they’re merely employees of the People, and trapped by Corporate America and their own party (money and threats).  We the People because we keep voting them back again and again. 

Now there’s only two methods of regaining control of our country: An Article V Convention or a Revolution.  Let’s try the Article V Convention for the purpose of proposing amendments and submitting them to all 50 States for ratification.  Amendments such as Term Limits for Congress, Balanced Budget, Supreme Court Reform, States Rights, Presidential Limitation, Debt Limitation, Immigration Reform, Legislative Process Reform, Campaign Financing, and Corporate Bailouts for a beginning.

For more information Google “ConventionUSA” and join them in an effort to regain our Republic, getting rid of career legislators by replacing them with Citizen Legislators.

I am one of those unemployed workers that has been jobless for well over a year and a half now, well I can say that I have been doing something with my time and that is getting a degree. So please do not cut down the unemployed we are not the ones that did the deed to start with; the way I see it is the first stimulaless package that went to the big companies that in turn pocketed the money themselves and left teh worker out on the street was the start of this whole mess.
I think what should have been done was give the people the money to start with so that we could have payed off our bills and that would have put the money right into the hands of the big companies in the long run while helping out the small.

We really should not be surprised about what the Republicans are doing, if we will recall some history.  They voted against Social Security and Medicare.  They voted for trickle-down economics.  Mitch McConnell and his feed-the-fat-cats party no only voted against the health care bill, they have vowed to find ways to thwart its implementation.  The Republican Party has always been for the rich, but many of us have been duped into supporting them because they claim to have so much concern for the life of the unborn.  At the same time, they would let the living go homeless and hungry.

For those losing their COBRA subsidy or who are struggling to find free or low-cost healthcare services, there are many community-based programs for healthcare services you may not be aware of. I would suggest downloading a book called The Healthcare Survival Guide at http://www.healthcaresurvivalguide.com. This book contains tips to save money, information on free or low-cost services and more. The book is currently being offered for free as a download from the publisher’s website but it can also be found on retail sites like amazon.com or Borders.com for $6.95 if you want a hard copy. To view the book, you need Adobe Acrobat Reader on your computer, and must register with the website. But it’s worth it.

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