Despite lingering signs of a weakened economy, a bipartisan budget deal working through U.S. Congress will not extend emergency benefits for the nation’s long-term unemployed past Dec. 28.
If the emergency benefits are allowed to expire, the cut will hit more than 36,000 Ohioans in December and 128,600 through 2014, according to left-leaning think tank Policy Matters Ohio.
Without the extension, Ohioans can tap into just 26 weeks of state-provided jobless aid. Federally funded emergency benefits give the unemployed another 37 weeks to find work before losing government assistance.
The emergency benefits were originally adopted by Congress to help Americans hit hardest by the Great Recession. The economy has improved since then, but some question whether it’s improved enough.
“There are 4.1 million workers who have been unemployed for more than six months, which is well over three times the number of long-term unemployed in 2007, before the Great Recession began,” write Lawrence Mishel and Heidi Shierholz of the left-leaning Economic Policy Institute (EPI).
Supporters claim the benefits boost the economy by allowing the long-term unemployed to continue buying goods and services that effectively support jobs. EPI estimates the benefits would sustain 310,000 nationwide jobs in 2014.
But at $25.2 billion a year, the emergency benefits come at a hefty price tag for conservatives who are trying to rein in federal spending.
EPI claims the “sticker price” overestimates the net cost of the benefits.
“The 310,000 jobs created or saved by the economic activity this spending generates will in turn generate greater federal revenues from the taxes paid on the wages earned by those who otherwise would not have jobs,” write Mishel and Shierholz. “They will also save the government money on safety net spending related to unemployment (for example, Medicaid and food stamps).”
U.S. Sen. Sherrod Brown, an Ohio Democrat, last week joined 31 other Democratic senators in support of extending the benefits.
“We must do everything we can to support those who are still struggling following the worst economic crisis since the Great Depression,” Brown said in a statement. “These are hardworking Americans — many with children — who have fallen on tough times.”
White House Press Secretary Jay Carney told reporters on Thursday the administration “absolutely expects” Congress to extend emergency benefits, but the extension could come after Congress reconvenes from a winter recess in January.
The House of Representatives on Thursday passed a bipartisan budget deal without an extension for the long-term unemployed. The Senate expects to take up the same budget bill sometime this week.