20100806 unemployment pamphlets 35
Pamphlets with information about unemployment are displayed at Eastbay Works Oakland One-Stop Career Center in Oakland, Calif. - 


Tess Vigeland: As of today, money has run out for federal jobless benefits. That's money that goes to unemployed people when their state benefits run out. And they last up to 99 weeks.

In every recent recession, Congress ponied up the money to fund these long-term unemployment checks. But so far members of Congress haven't come up with a deal to pay the $55 billion tab for another extension. That means millions will stop getting those benefits.

Marketplace's Mitchell Hartman has more on what that means for the economy and the people who count on that money for their survival.

Mitchell Hartman: If ever there were a confusing federal program, this is it. There are four tiers of unemployment benefits, based on how long someone's been out of work. And Maurice Emsellem of the National Employment Law Project says no one can add more time.

Maurice Emsellem: You collect your 20 weeks, you can't move up to tier 2, 3, and 4.

You can't move up because the federal cupboard is bare. But that doesn't mean all five million recipients stop getting checks today. Instead, they run out over the next few months.

Henry Aaron: There would be a significant hit in the near-term. It would grow cumulatively over time.

That's Henry Aaron of the Brookings Institution and he's one of many prominent economists who have called for another year of funding -- even if it adds to the deficit. Aaron says the benefits significantly boost the economy because the money's spent right away for food, gas and rent.

Aaron: With the reduction in spending by those who would lose their unemployment benefits, other people will lose jobs. You drop a long way and then you continue on down.

That downward spiral is about to get personal for Denise Maunder of Atlanta. Her checks run out in February. After 18 months on unemployment, she doesn't buy anything but necessities.

Denise Maunder: I've got it already pretty close to the bone. If I lose my unemployment, there's a risk of losing my car. And your car is what you need to get work.

If Congress does renew unemployment funding, it's expected to be retroactive to today.

I'm Mitchell Hartman for Marketplace.

Follow Mitchell Hartman at @entrepreneurguy