Senate Majority Leader Harry Reid (D-Nev.) is paring back a jobs bill proposal unveiled earlier on Thursday by the Senate Finance Committee, dropping an extension of unemployment insurance and COBRA health insurance subsidies for laid-off workers. The Senate is taking a break next week, so that stuff will have to wait until the end of the month -- the last moment before the previous extension runs out.
"State agencies are going to start sending out letters next week letting people know that their benefits are going to expire," said Judy Conti, a lobbyist for the National Employment Law Project.
So, even though it's entirely likely that Congress will pass an extension before Feb. 28 -- barring another major blizzard -- some people will nevertheless receive letters telling them they're not eligible for the next "tier" of benefits.
Last year's stimulus bill provided up to 53 additional weeks of federally-funded unemployment benefits (broken into several tiers) and a 65 percent subsidy of COBRA health insurance. When those provisions expired at the end of December, Congress scrambled to extend them another three months. If they're allowed to expire at the end of the month, 1.2 million people will exhaust their unemployment benefits in March.
"I think it's disturbing because there are four tiers of emergency unemployment compensation benefits, and if you're on a given tier, you only have a few weeks if the program isn't extended... Individuals could look at running out of benefits in a week or several weeks," said Rich Hobbie, director of the National Association of State Workforce Agencies.
Aside from the anxiety the situation creates for the unemployed, Hobbie said it's a huge administrative burden for state agencies. Norm Isotalo, spokesman for the Michigan Unemployment Insurance Agency, said Congress's dithering does indeed make work for his office.
"February 28 is rapidly approaching and we still don't have any certainty if the ending date is going to be extended, so the agency is preparing to wind down the payments of extended federally-funded unemployment benefits," Isolato told HuffPost. "But on the other hand, we have to be ready to pull the plug on these wind-down efforts if Congress acts. It could be a lot of wind-down work that all may go for naught if Congress extends the deadline date for these programs. And of course we hope that they do."
Isotalo said that even if Congress interrupts his agency's wind-down work at the last second, unemployed Michiganders would not see an interruption of their unemployment checks.
NELP is frustrated that Congress insists on taking a piecemeal approach to extending the benefits (the extensions do not allow people to stay on unemployment insurance for longer than already provided by the stimulus bill -- they allow people who've been laid off more recently access to the same additional tiers of financial support given to people laid off last year). The piecemeal approach guarantees that every extension will happen at the last second.
"It will always be held victim to a blizzard, to partisan politics, a flood in the spring, elections in the fall," said Judy Conti of NELP, which would rather Congress extend benefits for a full year. "What's going on in Congress is an ever-changing game. The American people and communities surviving on these unemployment benefits can't be held victim to this process."