WASHINGTON — Democrats are stepping up their efforts to extend a federal emergency unemployment program that expires at the end of the year, potentially leaving more than 65,000 Minnesotans without those benefits in 2014.
A federal budget deal reached this week would allow the program to expire, over the objections of Democrats who consider it a “critical lifeline” for the long-term unemployed. The program ends on Dec. 28 and 1.3 million Americans — 8,500 of them Minnesotans — would lose benefits that day, according to the Department of Labor. As other individuals exhaust their state unemployment aid, 4.9 million people total — 65,000 in Minnesota — would miss out on these benefits over 2014.
Congress instituted the emergency unemployment program in 2008 at the onset of the Great Recession. Lawmakers have extended them a handful of times, most recently last winter. As the economy has improved, they’ve tapered back the length of the benefits, from a maximum of 99 weeks (between both the state and federal programs) in 2008 to 54 weeks this year.
Democrats say the economy is still too weak to end the program. According to the Department of Labor, the federal unemployment rate (7.0 percent) is higher than it’s been for all but one of the last seven times Congress has let emergency unemployment benefits lapse.
But Republicans have argued the program is too expensive and doesn’t do enough to jump-start the economy, and they’ve resisted extending them into 2014. Doing so would cost about $25 billion.
The budget agreement announced by Rep. Paul Ryan and Sen. Patty Murray on Wednesday doesn’t fund the program, though lawmakers could find a way to do so next year while writing individual spending bills.
Democrats have indicated they’ll push for just that. Sens. Amy Klobuchar and Al Franken signed a letter last week asking Senate leaders to fund the benefits next year, and Sen. Harry Reid said Wednesday lawmakers will consider doing so when they return from a holiday recess in January.
In the House, 166 Democrats, including Minnesota Reps. Betty McCollum, Rick Nolan and Keith Ellison, signed a letter to Speaker John Boehner on Wednesday asking him to consider an extension. At a press conference, Boehner said he’d consider a bill, “as long as it’s paid for and as long as there are other efforts that will help get our economy moving once again.” But that plan has to come from the White House, and Boehner said he’s yet to see a proposal that meets his standards.
Benefits cut by sequestration
Emergency unemployment benefits kick in after would-be workers have exhausted their 26 weeks of state unemployment aid. The length of time they can receive these additional benefits depends on their state’s unemployment rate — because Minnesota’s rate is reasonably low at 4.8 percent, they’re eligible to receive an additional 14 weeks of aid.
Minnesota Unemployment Insurance director Rick Caligiuri said the state has been warning beneficiaries about the potential end of the program for a while now. But he said the state’s economic recovery has been strong enough that its unemployed are better off than in areas of the country where the situation is harder.
In a state like California, for example, where the unemployment rate is 8.7 percent and 214,000 residents stand to lose these benefits on Dec. 28, “It’s really going to be a major, major issue,” Caligiuri said.
About 8,500 Minnesotans are using the emergency benefits right now, according to the Department of Employment and Economic Development. At the recession’s peak, in January 2010, 130,000 people were on emergency programs.
Sequestration has reduced the amount of unemployment benefits by about 7 percent, Caligiuri said. Beneficiaries receive an average of $300 in aid a week, he said.
Given that the House leaves for its recess this Friday and Reid said the Senate would take up the benefits in January at the earliest, it’s almost certain the program will expire on Dec. 28. But Caligiuri said the state will be able to quickly get the program running again if Congress does come back next year and extend it.
“We’ve been prepared for this, we’ve been through this drill before,” Caligiuri said. As to whether he thinks Congress will act, “Any time I’ve tried to guess, I’ve been wrong.”
Devin Henry can be reached at email@example.com. Follow him on Twitter: @dhenry