Unemployment Benefits Extended by Another 14 Weeks
On November 6th, 2009 President Obama signed the Emergency Unemployment Compensation Extension Act, which would extend unemployment benefits by additional 14 weeks. Unemployed workers in states where the jobless rate is 8.5 percent or above will receive additional 6 weeks for a maximum of 20-week extension. The bill approved by Senate late last week and was signed into the law subsequently.
In February, as part of the stimulus, 20 more weeks were added, raising the maximum to 79 weeks. And after Friday, states added 14 to 20 weeks. Several states are seeing unprecedented levels of jobless rates. Check out Ohio unemployment, PA unemployment and NY unemployment pages to learn more about the rates and the trend.
Unemployment insurance generally replaces only about half of previous income, up to a maximum of about $400 a week. Most people lose their health insurance with their job, and they have to pay for a COBRA plan to remain covered. That’s an expensive proposition that eats up much of the monthly benefit.
Recently the unemployment rate topped 10% which was a record high in the past 26 years. This is the first time we have seen the unemployment rate in double digits in many decades. Many analysts are claiming that we are out of the trouble as we are coming out of recession but unemployment keeps raising and is a reason to worry for policy makers.
The extension is fully paid for and will provide immediate, effective relief to the local economy. The Congressional Budget Office has cited unemployment benefits as one of the most cost-effective forms of economic stimulus, and every dollar spent on unemployment benefits generates $1.63 in new demand, according to Moody’s chief economist Mark Zandi.
There is also the issue of the end-of-the-year filing deadline. The bill signed by Obama earlier this month, H.R. 3548, grants an additional six weeks of unemployment aid to jobless workers who will have exhausted their benefits by the end of 2009 and live in a state with an unemployment rate at or above 8.5 percent. But because the new law treats the 20-week extension as two separate extensions (one of 14 weeks and one of six weeks) with participants required to exhaust the first 14 weeks before applying for the next six, the December 31 application deadline prevents anyone from collecting the full allotment. (The end of the year is seven weeks away, so no one will have exhausted their initial 14 weeks by then.)
Currently, no fix has been introduced. But some members of Congress are open to the possibility of another broad unemployment extension that could address the deadline glitch and provide additional help to those who lose their insurance after the New Year.