Reed, Whitehouse defend unemployment benefits
In an effort to boost the economy and prevent 2 million Americans from abruptly losing unemployment benefits at the end of the year, U.S. Sens. Jack Reed and Sheldon Whitehouse, along with 40 Senate colleagues, are urging the preservation of federal unemployment programs.
Reed says preserving unemployment insurance through 2013 will spur consumer demand and help local businesses, states and struggling families. Reed warns that cutting off unemployment insurance could severely hinder economic recovery and harm the middle class.
The 42 U.S. senators sent a letter to Senate leadership. “We are writing to express our deep concern regarding the expiration of federal support for unemployment insurance at the end of the year,” he letter said. “Unemployment insurance is an essential component of our ongoing economic recovery and provides support to workers and their families who have been laid off through no fault of their own as they search for work.”
Despite recent declines in the unemployment rate, the letter notes that more than 12 million Americans are still looking for work. The federal program requires workers to search for jobs, and a recent study from Congress shows that beneficiaries of federal benefits have spent more time searching for work than those who were ineligible.
“Unemployment benefits have a proven economic impact,” said Reed. “They help individuals, businesses and states, and provide a major economic boost to the national economy as well.”
Last month, the Economic Policy Institute found that the U.S. economy would save about 400,000 jobs if federal jobless benefits were continued through 2013.
If Congress fails to act by the end of the year, approximately 2 million Americans – including almost 9,000 Rhode Islanders – could stop receiving their weekly unemployment checks, no matter where they are in the federal program. Starting Jan. 1, it will be back to a system of up to 26 weeks of jobless benefits, well below the 99 weeks of assistance Americans were eligible for at the height of the recession.
Additionally, by mid-April, another 1 million Americans will exhaust their 26 weeks of state benefi ts and will not be able to sign up for the federal program.
Congress already trimmed the program earlier this year, reducing the number of weeks of eligibility and covering an estimated 500,000 fewer Americans.
“We need to work together to create more job opportunities,” said Reed. “But until the labor market improves, preserving unemployment insurance is one of the most cost effective ways to help struggling families and businesses in our communities.”