1.3 million losing unemployment benefits Saturday - KSFY News - Sioux Falls, SD News, Weather, Sports

1.3 million losing unemployment benefits Saturday

Posted: Updated:

More than 1 million Americans are bracing for a harrowing, post-Christmas jolt as extended federal unemployment benefits come to a sudden halt this weekend, with potentially significant implications for the recovering U.S. economy. A tense political battle likely looms when Congress reconvenes in the new, midterm election year.

For families dependent on cash assistance, the end of the federal government's "emergency unemployment compensation" will mean some difficult belt-tightening as enrollees lose their average monthly stipend of $1,166.

Jobless rates could drop, but analysts say the economy may suffer with less money for consumers to spend on everything from clothes to cars. Having let the "emergency" program expire as part of a budget deal, it's unclear if Congress has the appetite to start it anew.

An estimated 1.3 million people will be cut off when the federally funded unemployment payments end Saturday.

Some 214,000 Californians will lose their payments, a figure expected to rise to more than a half-million by June, the Labor Department said. In the last 12 months, Californians received $4.5 billion in federal jobless benefits, much if plowed back into the local economy.

More than 127,000 New Yorkers also will be cut off this weekend. In New Jersey, 11th among states in population, 90,000 people will immediately lose out.

Started under President George W. Bush, the benefits were designed as a cushion for the millions of U.S. citizens who lost their jobs in a recession and failed to find new ones while receiving state jobless benefits, which in most states expire after six months. Another 1.9 million people across the country are expected to exhaust their state benefits before the end of June.

Gene Sperling, the director of the White House's National Economic Council, said Friday that President Barack Obama wants an extension as soon as Congress return next month, warning the abrupt cut-off will deliver a blow to the U.S. economy.

"It defies economic sense, precedent and our values," Sperling said.

But Obama has no quick fix. He hailed this month's two-year budget agreement as a breakthrough of bipartisan cooperation while his administration works with Democratic allies in the House and Senate to revive an extension of jobless benefits for those unemployed more than six months.

The Obama administration says those payments have kept 11.4 million people out of poverty and benefited almost 17 million children. The cost of them since 2008 has totaled $225 billion.

At the depth of the recession, laid off workers could qualify for up to 99 weeks of benefits, including the initial 26 weeks provided by states. The most recent extension allowed a total of up to 73 weeks, depending on the state.

Restoring up to 47 extra weeks of benefits through 2014 would cost $19 billion, according to the Congressional Budget office.

House Democrats led by Reps. Sander Levin of Michigan and Chris Van Hollen of Maryland sought to include an extension through March by offsetting the costs with potential farm bill savings. They were rebuffed.

Senate Democrats and some Republicans plan another push in 2014. Sens. Jack Reed, D-R.I., and Dean Heller, R-Nev., have introduced a bill offering a similar three-month extension, and Senate Majority Leader Harry Reid, D-Nev., has promised to bring it up. But as with much in Congress, an extension is no sure thing.

House Speaker John Boehner spoke with Obama about an extension earlier this month. Boehner and said his caucus would consider the possibility "as long as it's paid for and as long as there are other efforts that will help get our economy moving once again." He said White House has yet to introduce a plan that meets his standards.

For other Republicans, the bar is higher. Many of them look at signs of economic growth and an unemployment rate now down to 7 percent and expected to drop further as evidence the additional weeks of benefits are no longer necessary.

The effect of jobless benefits on the unemployment rates has been fiercely debated for decades. To qualify, people have to be seeking work. Tea partiers such as Sen. Rand Paul of Kentucky argue that the payments aggravate rather than relieve unemployment.

The benefits allow some jobseekers to hold out for higher wages. Without the benefits, they might accept lower-paying jobs, reducing the unemployment rate. Others may be looking for work only to keep the benefits flowing and will drop out of the job market entirely once the checks stop. In theory, that also would push the unemployment rate lower.

The flip side is that the benefits — in addition to alleviating suffering — get spent on consumer goods, stimulating the economy and creating jobs.

Extended unemployment insurance "is really a lifeline to help pay the bills, put food on the table, and put gas in the tank so people can look for work," argued Maurice Emsellem, policy co-director at the left-leaning National Employment Law Project.

Michael Feroli, an analyst at JPMorgan Chase, said ending the extended benefits will lower the unemployment rate by half a percentage point as the long-term unemployed leave the labor force. While that statistical change may look good on the surface, Feroli cautioned the drop could be accompanied by a similar decrease in consumer spending. That would also hurt clothing retailers, car dealers and other Main Street businesses.

Extending the program, on the other hand, would boost GDP growth by some 0.2 percent and increase full-time employment by 200,000 next year, the Congressional Budget Office estimated, but at the price of increasing the government's debt.

Advocates of extended benefits say communities hardest hit by the recession will feel the sudden loss of cash in circulation the most.

They cite a set of their own troublesome figures: three jobseekers still competing for each opening; some 4 million people in the ranks of long-term unemployed; unemployment lasting on average 37 weeks, two months longer than most states provide insurance.

  • A closer look at the future of unmanned aircraft

    A closer look at the future of unmanned aircraft

    Thursday, April 24 2014 10:40 PM EDT2014-04-25 02:40:03 GMT
    It cuts through the air in a matter of seconds. The hum of the rotors akin to a growing swarm, but this drone doesn't sting. Instead it gives pilot Adam Jungemann the opportunity to see the world like never before. "It's a chance to kind of cut loose and just fly and just be able to see everything! See things from a birds eye view, it's just totally different and it's a very freeing kind of feeling that way." Said Jungemann.As a videographer, Adam uses the DJI Phantom drone to give the AJ Pro...More >>
    It cuts through the air in a matter of seconds. The hum of the rotors akin to a growing swarm, but this drone doesn't sting. Instead it gives pilot Adam Jungemann the opportunity to see the world like never before. "It's a chance to kind of cut loose and just fly and just be able to see everything! See things from a birds eye view, it's just totally different and it's a very freeing kind of feeling that way." Said Jungemann.As a videographer, Adam uses the DJI Phantom drone to give the AJ Pro...More >>
  • Family happy everyone is OK after car crashes into house

    Family happy everyone is OK after car crashes into house

    Family happy everyone is OK after car crashes into house

    Thursday, April 24 2014 10:18 PM EDT2014-04-25 02:18:42 GMT
    A driver lost control and came crashing through the garage into his own home.More >>
    A driver lost control and came crashing through the garage into his own home.More >>
  • Agencies urge Governor Daugaard to expand Medicaid

    Agencies urge Governor Daugaard to expand Medicaid

    Thursday, April 24 2014 10:13 PM EDT2014-04-25 02:13:59 GMT
    Community health professionals and providers are urging Governor Dennis Daugaard to expand Medicaid under the Affordable Care Act.Despite the state legislative session being over, the Governor has the authority to expand Medicaid. Thursday's gathering at the Salvation Army in Sioux Falls was in part to inform people that Medicaid expansion is still possible. Rosti Voznyuk and his wife don't qualify for Medicaid right now, and he tells KSFY he can't afford the insurance provided by his employe...More >>
    Community health professionals and providers are urging Governor Dennis Daugaard to expand Medicaid under the Affordable Care Act.Despite the state legislative session being over, the Governor has the authority to expand Medicaid. Thursday's gathering at the Salvation Army in Sioux Falls was in part to inform people that Medicaid expansion is still possible. Rosti Voznyuk and his wife don't qualify for Medicaid right now, and he tells KSFY he can't afford the insurance provided by his employe...More >>
  • Avera Medical Minute ASL: Meeting the need for Family Care Physicians

    Avera Medical Minute ASL: Meeting the need for Family Care Physicians

    Thursday, April 24 2014 10:00 PM EDT2014-04-25 02:00:12 GMT
    It's not always easy to attract new doctors to rural South Dakota. In Aberdeen, there's been a growing demand in the family practice field. At Avera St. Luke's hospital, they're meeting that need with exceptional talent. "Hi Mason! I'm Dr. Shawn, how are you my friend?" Asked Dr. Shawn Bartel, with Avera Aberdeen Family Physicians.The moment he walks in the door, you can tell Dr. Shawn Bartel loves what he does. As the newest face at the Avera State Street Medical Square, he's hit the ground ...More >>
    It's not always easy to attract new doctors to rural South Dakota. In Aberdeen, there's been a growing demand in the family practice field. At Avera St. Luke's hospital, they're meeting that need with exceptional talent. "Hi Mason! I'm Dr. Shawn, how are you my friend?" Asked Dr. Shawn Bartel, with Avera Aberdeen Family Physicians.The moment he walks in the door, you can tell Dr. Shawn Bartel loves what he does. As the newest face at the Avera State Street Medical Square, he's hit the ground ...More >>
  • Gravity coaster coming to Storybook Land

    Gravity coaster coming to Storybook Land

    Thursday, April 24 2014 8:18 PM EDT2014-04-25 00:18:49 GMT
    Storybook LandStorybook Land
    Storybook land is a place kids and parents can go to have a good time.“I come here with my dad and mom,” Joshua Chambers said. Chambers heads to the park often, and the Aberdeen Sertoma Club, and Parks and Recreation Department have some new ideas to bring a little more fun to the park“The first ride to be put in place will be the gravity coaster, it’ll be a really nice addition to the park,” Parks and Rec. Director Doug Johnson said. Right now storybook land has only a few rides, but what th...More >>
    Storybook land is a place kids and parents can go to have a good time.“I come here with my dad and mom,” Joshua Chambers said. Chambers heads to the park often, and the Aberdeen Sertoma Club, and Parks and Recreation Department have some new ideas to bring a little more fun to the park“The first ride to be put in place will be the gravity coaster, it’ll be a really nice addition to the park,” Parks and Rec. Director Doug Johnson said. Right now storybook land has only a few rides, but what th...More >>
  • Two young girls miraculously survive car crashing into their Sioux Falls home

    Two young girls miraculously survive car crashing into their Sioux Falls home

    Thursday, April 24 2014 7:40 PM EDT2014-04-24 23:40:41 GMT
    A Sioux Falls family is without a home this morning after a car drove into their home overnight.More >>
    Sioux Falls police say it’s a miracle two young girls are alive after a car crashed through a garage and into their bedroom overnight.More >>
  • Smartphone automatically posts selfies of man who took phone

    Smartphone automatically posts selfies of man who took phone

    Thursday, April 24 2014 7:35 PM EDT2014-04-24 23:35:05 GMT
    A Flandreau man tells us he lost his phone, and found a murderer. The person who unknowingly posted selfies to Facebook with the phone happened to be a wanted man, and a convicted murderer.More >>
    A Flandreau man tells us he lost his phone, and found a murderer. The person who unknowingly posted selfies to Facebook with the phone happened to be a wanted man, and a convicted murderer.More >>
  • 'Farmland' documentary featuring SDSU alumni premiering in Sioux Falls

    'Farmland' documentary featuring SDSU alumni premiering in Sioux Falls

    Thursday, April 24 2014 5:28 PM EDT2014-04-24 21:28:06 GMT
    Academy Award-winning filmmaker James Moll’s new feature length documentary, Farmland, will be released nationally May 1, 2014. Sioux Falls has been selected to host a premiere, and the film will come to Sioux Falls for a one-time showing on May 1 at 7 p.m. at the Century East at Dawley Farm theater.More >>
    Academy Award-winning filmmaker James Moll’s new feature length documentary, Farmland, will be released nationally May 1, 2014. Sioux Falls has been selected to host a premiere, and the film will come to Sioux Falls for a one-time showing on May 1 at 7 p.m. at the Century East at Dawley Farm theater.
    More >>
Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and KSFY. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service or our EEO Report.