Monday, December 07, 2009

Arizona, Iowa, Kansas, Maine, New York and Washington Urged Congress To Action To Extend Unemployment Benefits Today

State labor officials and worker advocates on Monday appealed for quick Congressional action to extend emergency unemployment benefits and to renew health insurance subsidies for the long-term jobless.

Prolonged unemployment insurance, passed this year in the stimulus act, expires this month, and officials estimate that more than one million workers will see benefits end in January if Congress does not act.

The health subsidies, under which the federal government pays 65 percent of insurance costs under Cobra for up to nine months, have already expired and are not available to the newly unemployed, who will have to pay family premiums averaging $1,100 if they want to keep their existing health plans.

Renewal this month of both forms of aid is “a moral imperative,” Sandi Vito, the secretary of the Pennsylvania Department of Labor and Industry, said at a news conference here on Monday. Ms. Vito, who was joined by senior labor officials from seven other states, said the extensions were needed “through at least the end of 2010 as a bridge for people.”

Congressional aides said in interviews that renewing the aid programs has bipartisan support.

Democratic Congressional leaders are considering adding these safety net measures to a final spending bill for government operations in the current fiscal year, which they plan to pass before the end of the month. But the immediate prospects were uncertain, particularly in the Senate, which is dealing with health reform and where there is disagreement over how long any emergency extensions should last.
Another year of extended benefits and aid for health insurance, including related tax breaks and a $25 a week addition to benefits that Congress provided this year, would cost about $100 billion, officials estimate.

The state officials and private advocates said on Monday that any delay in renewal would have disastrous effects on people who are on the edge of foreclosure or eviction. Also, if states have to send letters to recipients saying aid is ending and then later must reinstate benefits, “it’s going to be a devastating administrative burden,” said David Socolow, New Jersey’s commissioner of Labor and Workforce Development, and would cause delays for applicants.
While national unemployment declined slightly last week, to 10 percent, more than 15 million workers remained unemployed in October and 36 percent of them were jobless more than six months — the highest level of so-called long-term unemployed since data collection started in the late 1940s.

Raj Chetty, an economist at Harvard University, said that with so many jobless for so long, the traditional concerns that prolonged benefits would reduce incentives to work were less germane.

“In this economy people will take almost any work they can get, and the prospect of another 13 weeks of benefits isn’t going to alter that significantly,” he said. “People have depleted their savings and exhausted the help of relatives.”
So with prolonged aid, Professor Chetty added, “You are in effect helping them to feed their kids.”

Douglas Holmes, president of UWC, which represents businesses on unemployment insurance and compensation issues, said his group was “not opposed to some further extension,” but cautioned against prolonging benefits too long or adding tax burdens on employers, who already face increases in state unemployment taxes.
The first 26 weeks of unemployment benefits, which average just over $300 a week, are paid by the states with money collected from employers. This year, as part of the stimulus act, Congress agreed to pay for an extra 34 to 53 weeks, depending on a state’s jobless rate. Then, in November, as large numbers started to exhaust that aid, Congress added another 14 to 20 weeks, bringing the potential total to 99 weeks in many states.

But without Congressional action, the extra federal aid will quickly wind down. People who lost their jobs after July 1 of this year, for example, would receive no federally paid extensions once their customary six months of state aid runs out. The extensions are provided in segments and those who are already receiving help in one stage, often awarded for 13 weeks, would finish that term but not receive additional weeks of aid they may have expected.

In January alone, without a renewal, benefits would halt for more than one million unemployed people, according to projections by the National Employment Law Project, an advocacy group and a co-sponsor of Monday’s press conference, based on data received from the states.

Ms. Vito, the Pennsylvania official, said her office had started receiving desperate calls from people whose health subsidies had just ended and who were unable to pay the full premiums themselves. Under federal Cobra provisions, a laid-off worker can retain his or her previous health insurance for up to 18 months by paying the full cost.

But many, without work, cannot afford the premiums. The federal government this year has paid 65 percent of the cost for up to nine months. Large numbers who started receiving the subsidy this year have used up their time, and since Dec. 1, the aid has not been available for the newly unemployed.
For the average worker with a family plan, the premiums required under Cobra add up to nearly as much as unemployment benefits, according to Families USA, a group advocating health care reform.

Also participating in Monday’s call for action were officials of the A.F.L.-C.I.O., the Leadership Conference on Civil Rights and the National Women’s Law Center. State officials from Arizona, Iowa, Kansas, Maine, New York and Washington joined in the plea for Congress to act.

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