Congress Fails to Extend Unemployment Benefits

Unemployment

With the clock running down Saturday and long-term unemployment benefits set to expire, Congress failed to pass an extension for the federal program that will affect upwards of 1.3 million long-term unemployed Americans.

The expiration of unemployment benefits is expected to be a significant drag on the economy moving into the new year and reinstating those benefits is expected to be one of the highest priorities for congressional Democrats in 2014. Now that the benefits have expired, unemployment coverage will revert to 26 weeks of coverage rather than the 47 weeks it has been since 2008.

The discussion over reinstating the long-term unemployment benefits early next year is expected to be a partisan battle between Democrats and Republicans who have opposing arguments about the program’s merits. Democrats argue that the loss of unemployment benefits will negatively affect the economy, holding the belief that the increase in consumer spending offsets the $25 billion that it would cost to extend the program for one full year. But Republicans believe that the program can act as a disincentive for job hunting and is not necessary as the economy improves and unemployment numbers trend downwards.

Despite the arguments between Democrats and Republicans over the necessity of the unemployment benefits program, congressional Republicans have indicated that they are willing to extend the program if Democrats make spending concessions in other areas of the budget.

On Friday, President Obama called Senator Jack Reed (D-RI) and Senator Dean Heller (R-NV) to lend his support for their proposal to extend unemployment benefits another three months. Senate Majority Leader Harry Reid has indicated that the topic will be a top priority when Congress returns from break in early January.

Heller, one of the few Republicans to back an extension to the unemployment programs, has spoken strongly of the government’s need to extend the program, drawing on his experience with Nevada’s unemployment rate.

“As Nevada’s unemployment rate continues to top the charts nationwide, many families and individuals back home do not know how they are going to meet their basic needs,” Heller wrote in a statement. “Providing a safety net for those in need is one of the most important functions of the federal government.”

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