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Jobless benefits headed for cliff?


February 19. 2013 6:48PM
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W ASHINGTON'S focus on the fiscal cliff – a potentially disastrous combination of tax hikes and spending cuts scheduled to go into effect Jan. 1 – has shifted attention away from the biggest problem in the economy, which is the more than 12 million Americans still unemployed.


More than 5 million of them have been sidelined for more than half a year, which means they're no longer receiving unemployment insurance benefits from their state. Instead, many are receiving extended unemployment benefits paid for by the federal government. Unless Congress agrees to renew the program, however, that support will end as well, even before the country reaches the fiscal cliff.


Acknowledging that the economy is improving, albeit slowly, Congress already has slashed the duration of federal benefits by 30 percent for the average state, cutting the cost of the program roughly in half. Lawmakers also created tiers of benefits, allowing job-seekers in states with higher unemployment rates to remain eligible for longer periods. That's a sensible approach that gradually steps down the aid as the employment situation improves.


On Dec. 29, however, there will be no phase-out. The federal Emergency Unemployment Compensation program will simply end, immediately cutting off benefits to more than 2 million Americans, the Labor Department estimates. By economist Mark Zandi's projections, the failure to renew the program will cost almost twice as much in lost economic growth due to the reduction in consumer spending. It's a mistake that's both cruel and unaffordable, and Congress shouldn't make it.


Los Angeles Times




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