Unemployment benefits in peril

Unless Congress renews them, federal benefits will end before the near year

By Andrew Clevenger / The Bulletin / @andclev

Published Nov 25, 2012 at 04:00AM

WASHINGTON — Unless Congress takes action before Jan. 1, tens of thousands of unemployed Oregonians will lose almost a year's worth of unemployment benefits in the new year.

Under current law, people claiming unemployment benefits are eligible for up to 47 weeks of payments under the federally funded Emergency Unemployment Compensation program, which is set to expire at the end of the year. Eligibility for this program kicks in only after people have exhausted 26 weeks of coverage paid for by Oregon's Unemployment Trust Fund, which is sustained by employer contributions, so the change would affect people who have been unemployed for six months or more.

Since the election, much of the focus in Washington has been on how to avert the fiscal cliff, either by raising taxes or cutting government spending, or both. In the highly charged, partisan negotiations over how to proceed, the unemployment program often gets overlooked.

“If this program expires, there will immediately be 2 million people across the country who immediately fall off these benefits in January,” said Judy Conti, federal advocacy coordinator with the National Employment Law Project. “(That's) a pretty draconian literal cliff.”

When the Emergency Unemployment Compensation program was first signed into law by President George W. Bush in June 2008, the national unemployment rate was 5.6 percent, and less than one in five of those had been looking for work for six months or more. In February 2012, when President Barack Obama extended the program through the end of the year, unemployment stood at 8.3 percent, but more than 40 percent of job seekers had been out of work for at least six months.

Throughout the recession and the sluggish recovery, Oregon's unemployment rate has stayed above the national average. In October, it stood at 8.6 percent statewide, down from 9.3 percent a year earlier, according to the Oregon Employment Department.

In Central Oregon, the numbers have been even worse. Deschutes County had an unemployment rate of 10.9 percent in October, down from 12.2 percent in October 2011. Jefferson County's rate dropped to 12.2 percent from 13.1 percent over the same period, while Crook County's dipped to 13.5 percent from 14.4 percent.

For the week ending Nov. 3, the most recent figures available, 43 percent (1,476 out of 3,449 total) of people receiving unemployment benefits in Deschutes County were covered under the federal emergency program. The rates of long-term unemployed in Jefferson County (36 percent, or 124 of 348) and Crook County (45 percent, or 208 of 466) were also high.

Statewide, 43 percent (29,266 out of 68,159) of those collecting benefits were using the federal program.

Mary Bernert, an unemployment economist with the Oregon Employment Department, projects that between 25,000 and 28,000 claimants will exhaust all of their benefits if the Emergency Unemployment Compensation program ends Dec. 31.

A study published this month by the Economic Policy Institute, a liberal-leaning think tank based in Washington, D.C., concluded that 400,000 jobs would not be created in 2013 if the federal program were allowed to lapse. Even though it would cost $30 billion to extend the benefits for one year, it would produce $48 billion in economic activity, since unemployed people are highly likely to spend the money quickly, according to the study.

“That's a lot of money to pull out of local economies; in the middle of winter when people need housing and heat, it's particularly cruel to let those benefits disappear,” said NELP's Conti.

Given the bigger economic problems facing the country and the limited time left to address them, it's unclear whether Congress will address the Emergency Unemployment Compensation program, she said.

“The fiscal cliff is sucking the air out of every room,” she said.

If a deal is struck before Jan. 1, it probably won't have every detail worked out, she said. It will likely include a framework for deficit reduction, a down payment towards the debt and an enforcement mechanism to make sure both sides follow through.

“We want to make sure that unemployment insurance is part of that down payment,” she said.

Last year, unemployment insurance benefits kept 2.3 million people out of poverty, including 620,000 children who lived with a family member receiving benefits, according to a report published last month by the Congressional Research Service.

Latest jobless rates

Oregon: 8.6 percent

Deschutes County: 10.9 percent

Jefferson County: 12.2 percent

Crook County: 13.5 percent

Numbers for October. Source: Oregon Employment Department