Worries grow over cuts to unemployment aid

People stand in a line that stretched around the block to enter a job fair on March 21, 2012 in New York City.

It used to be that you could get unemployment insurance for just six months. During the recession, Congress extended that, to a maximum of 99 weeks. That and subsequent extensions have cost the federal government an additional $384 billion.

“That is due both to the extended length of time that people could receive [benefits],” says James Ziliak, the Gatton Endowed Chair in Microeconomics at the University of Kentucky. “But it is mostly due to the fact there are just so many Americans who fell into unemployment.”

Last month, the Department of Labor said five million Americans have been jobless for more than six months.

If the U.S. economy goes over the “fiscal cliff” at the end of the year, millions of out-of-work Americans would lose their unemployment benefits. 

The current extension expires at the end of December, and if congress doesn’t renew it, more than two million of those Americans will be unable to collect unemployment insurance.

“Obviously, many of these people continue to try to find jobs, and I have no doubt that they will continue to try to find jobs -- even in the absence of any sort of unemployment insurance benefits,” says Matt Freedman, an assistant professor of economics at Cornell University.

But they may have to do that with a lot less help. 

So far, the focus of the “fiscal cliff” negotiations has been on tax increases and automatic spending cuts, not on extending unemployment. 

About the author

David Gura is a reporter for Marketplace, based in the Washington, D.C. bureau.
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There is no 'fiscal cliff' there is only a failure of the justice system to return trillions of dollars in fraudulent gains to government coffers. Putting millions of unemployed workers to work auditing and investigating fraud in defense, health care, and financial industries will require no taxpayer money and could bring back the $14 trillion needed to pay off the debt. It is easy, it is just, and no Republicans needed. So, why is that not the Democratic approach to paying down the national debt? The democratic leadership is Third Way corporate/wealth pols who are working to protect against these kinds of policy! Vote incumbents out of office if you do not hear them shouting for this solution.

Everyone needs to understand that the situation which we all are is not going to get better in a day but yes,This situation is going to be stable in a year or so as the latest trade economy suggests and this would give lots of Americans an opportunity to show their talent.

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