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With Federal Benefits Set to Expire, Unemployed Workers Face Shrinking Safety Net

With unemployment at 9.6 percent and state unemployment funds in shambles, federal programs to extend the safety net for unemployed workers are set to expire unless lawmakers intervene.

Unless Congress acts to extend programs for those who have exhausted regular state unemployment benefits, millions of jobless workers may soon be phased out of emergency unemployment benefits.

Unemployment benefits from states typically last for 26 weeks, but since 2008, Congress has on four occasions passed emergency provisions that use federal funds to extend benefits for jobless workers by up to 73 weeks, depending on the state’s laws and unemployment rate. These benefits are set to expire tomorrow unless lawmakers intervene.

According to The Hill, a yearlong extension of federal unemployment benefits, which the White House supports, would cost an estimated $65 billion. (A New York Times editorial over the weekend noted that this would be a far smaller blow to the deficit than extending George W. Bush’s tax cuts for those making more than $250,000 annually. Not extending federal unemployment insurance, it noted, would cause 2 million unemployed workers to be cut off from federal unemployment benefits by the end of the year.)

But as we’ve reported in our examination of the unemployment insurance system, federal funds are going to the states regardless. We updated the data today, and by our calculation, 31 states have together borrowed more than $41 billion from the federal government due to shortfalls in their unemployment trust funds.

According to a congressional report released last week, more than 40 percent of jobless workers have been unemployed for at least 27 weeks—longer than the 26 weeks’ worth of benefits that some states are still borrowing to cover. Failure to extend the federal benefits, according to the bipartisan Joint Economic Committee, would result in spending more on other programs, such as disability insurance, assistance to needy families and food stamps.

Last week, House lawmakers voted on a measure to extend federal unemployment insurance by three months, but it did not pass. Benefits will begin to lapse if an extension still doesn’t pass before the deadline on Tuesday, though if lawmakers succeed in passing one later, they may grant the benefits retroactively.

For more on the state of the nation’s unemployment insurance system, check out our Unemployment Insurance Tracker to see if your state has already been borrowing to cover its share of benefits for unemployed workers.

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