CQ TODAY ONLINE NEWS
Dec. 9, 2011 – 10:03 p.m.
Jobless Aid Plan Means Further Negotiations
By David Harrison, CQ Staff
The payroll tax cut extension that the House will consider this week would roll back expansions of unemployment benefits enacted in 2008 and 2009 and give states broad leeway to create alternative programs to put people back to work.
Under the House Republicans’ plan (
Extending the curtailed package of jobless aid would cost about $34 billion, most of which would be incurred in 2012 and 2013.
Right now, most states offer 26 weeks of state-paid benefits to people who have been laid off, supplemented by up to 73 weeks of federally financed benefits. That means long-term unemployed people in hard-hit states can receive up to 99 weeks of aid. Roughly 3.5 million people receive the federal benefits.
Many Republicans say those benefits are overly generous and reduce incentives to work. Democrats counter that it is impossible for millions of long-term unemployed people to find jobs, because nationally there are four times as many of them as there are available positions.
The benefits cut would happen in several phases and would have a greater effect on states with higher unemployment rates. The bill would eliminate 14 weeks of federally financed long-term benefits available in all states after people exhaust their state benefits. And it would do away with an extra six weeks available in states where the jobless rate exceeds 8.5 percent. These two changes would take effect immediately.
An additional 20 weeks of federally financed emergency aid to the long-term unemployed would be phased out through the course of next year. The emergency aid is normally a joint federal-state program. In the past, however, state restrictions have made it impossible for many long-term unemployed people to qualify.
In 2009, the federal government took over financing of the emergency program and relaxed the rules.
The additional aid is allocated through a formula that takes into account both a state’s unemployment rate and how that rate has increased over the previous three years. Because state unemployment rates, although still high, have not climbed much since the start of the recession, many states will become ineligible for the aid starting next year.
In his September legislative package to promote job creation, President Obama proposed keeping current law in place, which would phase out the federally financed emergency aid. A proposal from House Democrats (
The GOP proposal also would repeal a requirement that states not cut weekly benefits to get federal grants.
Limiting Some Benefits
The House GOP plan would also bar millionaires from receiving unemployment benefits or food stamps, which would save $20 million over a decade, according to the Joint Committee on Taxation. Senate Democrats included similar provisions in their proposals to extend the payroll tax cut, which did not get the 60-vote majorities needed in that chamber. But means-testing benefits is not a popular option with the liberal wing of the Democratic Caucus.
Jobless Aid Plan Means Further Negotiations
The Republican plan includes some areas of overlap with Obama’s September proposal. Both suggested making it easier for states to test-pilot programs modeled on experiments in Georgia and North Carolina. Both put forward such ideas as using unemployment benefits to subsidize employers to train workers or implementing job-sharing programs in which employees work reduced hours and use benefits to make up for their lost wages.
Despite such areas of agreement, the Republican plan is sure to hit a wall in the Democrat-controlled Senate. Democrats were quick to dismiss reports that House Republicans would propose reducing long-term benefits.
“That’s not acceptable,” Sen.
“What they appear to be doing is following the path of blaming the victims of the economic downturn,” said Rep.
Republicans, however, were supportive. Over the past few weeks, many GOP lawmakers expressed ambivalence over extending both the payroll tax cut and long-term jobless aid. But many said last week that they would back the plan put together by House leaders.
“This is a plan that unites our base in the conference in a way that few other plans have in the past,” said Rep.
Offering up to 99 weeks of long-term benefits allows people to “wait a little longer before they’re having to look for a job,” he said. “This really, I think, puts us moving in the right direction.”