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Long-Term Jobless Get Their Money Back After Congressional Lapse

First Posted: 08/25/10 01:23 PM ET Updated: 05/25/11 06:25 PM ET

Most of the 2.5 million long-term jobless cut off from unemployment insurance during a 50-day congressional standoff this summer have received the money they missed. But for some, the back payments are not enough to make up for the financial burden caused by a lapse in crucial benefits.

"By the time I received the money we had sold just about everything of value we owned in order to stay as close to current with all debts as possible," wrote Steve Santos of Zion, Ill. in an email to HuffPost on Aug. 5. "I sold my golf clubs last week, the last personal item of value I had left. I have not played all year; I usually play every Sunday from April through October with a college buddy and others."

Santos, who said he lost his job as a retail manager in November, received the standard 26 weeks of state-funded benefits. But he was cut off from the federally-funded extended benefits as the Senate dithered over whether to reauthorize the benefits after they expired at the end of May. A spokesman for the Illinois Department of Employment Security told HuffPost the state paid 90 percent of back benefits by July 30. Santos said he received two lump sum payments totaling $2,497 shortly thereafter.

"I wonder when and if I will ever find a job," Santos wrote. "I am not entrepreneurial, but I have made money for every employer I had. I am 55, face a future of minimum wage or less, which in turn minimizes my already meager Social Security pension, if it isn't torn from us. We lost all savings, including our 401K's, using hardship clauses to withdraw them. So what hope does our future hold?"

In some states, the local labor department was unable to get the money out so speedily. The Las Vegas Review-Journal reported that long-term jobless only received back payments last week because "the claims backlog created by the lapse overwhelmed the ability of the Nevada Department of Training and Rehabilitation to deliver the money." Other states boasted they began processing claims the same day the president signed the reauthorization and finished distributing back payments within two weeks.

Republicans in the Senate, joined by Nebraska Democrat Ben Nelson, blocked the extended unemployment benefits because of their $33 billion impact on the deficit -- though not even fiscally conservative economists outside of Congress thought nickel-and-diming the unemployed was a smart strategy for deficit reduction. Republicans on the campaign trail, joined by colleagues in the House and Senate (and a few Democrats, too) suggested the extended benefits, which in some states gave the unemployed 99 weeks of aid, discouraged people from looking for work.

Judy Barbee of Calvert County, Md. told HuffPost she lost her job as a senior legal secretary at a D.C. law firm in June 2009 and has since gone bankrupt and lost her house. "Not only do I job search daily, I have applied to hundreds of offers, but rarely get any kind of response."

Barbee said she withdrew $10,000 from her IRA and took a $9 per hour part-time job at a gas station after her benefits stopped. She said that with the reduction in her weekly benefit caused by the part-time work, her total income is $3 more per hour than it would be with the benefits alone. "Words are not enough to express how angry, frustrated, humiliated, and devastated I am," wrote Barbee, 59. "It appears the elitists (Congress, corporations and their lawyers) are trying and succeeding in demolishing middle class America."

David Britton of Louisville, Ky. told HuffPost the chunks of money he received from the Kentucky Office of Employment and Training were gone within 28 hours as he paid off creditors. "What can't be made up is the late fees, overdraft fees, and damage to credit etc. that occurs when you simply have no money," wrote Britton, 60, who said he lost his job as a sales director in December. "Plus the creditors don't go away. They extract promises for lump sum payments in the future where you hope to be employed. I will be facing quite a few of those in September."

Britton said he became adept at "existential unemployment decisions" during the congressional lapse, racking up more than $1,000 in overdraft fees to keep the electricity on and the rent paid, but let go of things like the phone and DSL. "I haven't used my grill all summer," he said -- but he added that he's optimistic about his prospects as a food- and beverage-industry consultant.

The reauthorization that the Senate approved at the end of July lasts until November, when Congress will once again battle over whether to maintain the lifeline to the 6.5 million people who've been out of work for longer than six months.

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