CBO: Unemployment Benefits Prevented Record Poverty Rate In 2009

WASHINGTON -- Extended unemployment insurance put in place to fight the recession prevented the poverty rate from rising to 15.4 percent in 2009, a level unseen since the 1960s, according to the Congressional Budget Office. The government announced in September that that the 2009 poverty rate had risen to 14.3 percent from 13.2 percent the previous year.

The CBO's analysis, produced at the request of Rep. Jim McDermott (D-Wash.), chairman of the House Ways and Means subcommittee on Income and Family Support, shows that unemployment insurance is essentially a middle-class benefit. Households with total income more than twice the poverty threshold accounted for 70 percent of the $120 billion the government spent on unemployment benefits last year. Families with income below the poverty threshold received eight percent of all benefits.

As CBO explains, "The higher-income families received a larger share of benefits for several reasons: because only people with sufficient recent work histories qualify for benefits, benefit levels rise with previous earnings, and receiving benefits tends to push families into higher income groups."

CBO found that almost half of all families with one person unemployed received benefits in 2009, with the aid accounting for 11 percent of the family's total income -- about $6,000.

Congress routinely gives the unemployed extra weeks of benefits during recessions. In 2008 and 2009, Congress gave the jobless up to 73 weeks of federally-funded benefits on top of the 26 weeks provided by states, meaning the unemployed in some states are eligible for 99 weeks of benefits.

If Congress fails to reauthorize the benefits by the end of the month, the federal programs will lapse and people laid of through no fault of their own will be eligible only for the first 26 weeks of benefits. Roughly two million people will be cut of from benefits by the end of the year, according to the Labor Department.

Comments

[ColinStevens]

02:08 PM on 11/19/2010

And Republicans have voted AGAINST unemployment benefits EVERY TIME -

- because they WANT America to fail. Republicans HATE AMERICA. PERIOD.

[breakingpoint]

04:55 PM on 11/18/2010

google: CRASH JP Morgan BUY SILVER

[texastrixie]

04:53 PM on 11/18/2010

Come on people, don't you get it? Another record we could get - the largest population of people living below the poverty line of any developed country! A Republican's dream come true.

[osage]

12:13 PM on 11/18/2010

REAGAN REPUBLICAN: THE GOP SHOULD FILE FOR BANKRUPTCY

Daivd Stockman rushes into the ring swinging like a boxer: "If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation's public debt ... will soon reach $18 trillion." It screams "out for austerity and sacrifice." But instead, the GOP insists "that the nation's wealthiest taxpayers be spared even a three-percentage-point rate increase."

In the past 40 years Republican ideology has gone from solid principles to hype and slogans. Stockman says: "Republicans used to believe that prosperity depended upon the regular balancing of accounts -- in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses too."

No more. Today there's a "new catechism" that's "little more than money printing and deficit finance, vulgar Keynesianism robed in the ideological vestments of the prosperous classes" making a mockery of GOP ideals. Worse, it has resulted in "serial financial bubbles and Wall Street depredations that have crippled our economy." Yes, GOP ideals backfired, crippling our economy.

Stockman's indictment warns that the Republican party's "new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one:"

http://www.marketwatch.com/story/reagan-insider-gop-destroyed-us-economy-2010-08-10

[blueken]

11:28 AM on 11/18/2010

Talk about the law of unintended consequences. By de-regulating vast swaths of our financial system and allowing the invisible hand of the market place to self regulate we have created a socialist welfare state. Ironic, ain't it? We even had to bail out the banks. Now that the banks and Wall Street have been bailed out, the deficit is our biggest problem. Why? Because those people that our national wealth bailed out, don't want their taxes to go up. WOW!

[holyghostie]

07:19 AM on 11/18/2010

Dear Democratic Congress people and senators. It is time for you to make one of those symbolic bills that the Republicans are famous for. Here is what yours should say.

In an effort to reduce the debt, and to provide an olive branch to our conservative Republicans congress will pass a law allowing state and county clerks to use their voter registration rolls to decide who gets extended unemployment benefits. Those who are Republicans will be denied in keeping with their ideaology and desire to reduce the debt, and to reduce gov't reach into their lives. We do this to help the Republican electorate stay as idealogically pure as their politicians.

Those families with an I or a D designation will be given extended benefits because they realize that Gov't is good, and is there to help when nobody else can.


We need something like this said by a political leader in DC on the air so that it gets national coverage and calls out the stupidity and hypocrisy of the Republican party.

[texastrixie]

04:53 PM on 11/18/2010

Unfortunately, the incoming Congress will be more likely to apply this rule to Democrats, and in reality has for some time.

[OldTulsan]

11:32 PM on 11/17/2010

http://www.cepr.net/index.php/press-releases/press-releases/pre-recession-unemployment-rates-may-not-be-reached-for-a-decade
Pre-Recession Unemployment Rates May Not be Reached for a Decade | Press Releases

"WASHINGTON, DC- As recent calls for additional stimulus and the extension of unemployment benefits meet with stiff opposition, Congress appears to have underestimated the profound effect of the current recession on the labor market. A new report from the Center for Economic and Policy Research (CEPR) shows that with a job growth path comparable to the last recovery, the economy will not recover all of the jobs lost in the recession until March 2014. Assuming the trend rate of growth in the labor force, the unemployment rate will not fall back to the pre-recession level until April 2021.

"The economy desperately needs action on job creation," says John Schmitt, a senior economist at CEPR and a co-author of the report. "At current and projected job creation rates, we will still be suffering from the effects of the downturn well into the next presidential term."

The study, “The Urgent Need for Job Creation,” compares various job growth scenarios with the job loss seen in the recession and projects when the lost jobs will be regained and when the unemployment rate will return to pre-recession levels in each case..."

"Lost generation" and "boomerang kids" will be common phrases.

[Timma]

10:38 PM on 11/17/2010

Gee that's something to be proud of in the economic poweerhouse USA - 15% poverty. Republicans should be in favor of UI. It makes them look more successful.

[Reno Fickler]

10:14 PM on 11/17/2010

If their benefits run out in December, then there will be 2,000,000 less unemployed in Jan, 2011.
The govt only counts the ones who are getting UI.

[Counterglow]

11:55 PM on 11/17/2010

No doubt this is the Republican plan for improving the economy. When people are so broken and hopeless they've given up looking for work, they won't count as unemployed anymore. So then they'll claim that under a GOP government, unemployment went down.

[goodmarina]

02:30 AM on 11/18/2010

agreed!

[Kurt Mundt]

05:57 AM on 12/02/2010

No doubt they will be feted for their determination to reduce Unemployment.

[Arthur Delaney]

08:42 AM on 11/18/2010

The unemployment rate isn't calculated based on who receives UI. It's based on a survey of households.

[texastrixie]

04:55 PM on 11/18/2010

That's the household survey. I think one of our unemployment rates is based on the number of people seeking unemployment compensation, that is why, when people are kicked off because their eligibility time is over, it makes things look better than they are.

[GonzoFL]

06:53 PM on 11/18/2010

Speaking of that household survey.....has anyone you know or know of every gotten that survey call.

[freds head]

09:51 PM on 11/17/2010

Clinton ended welfare in 97, it was a system that was self perpetuating. Families were on it for generations. Amazing upon its end the recepients managed to cope ie find work (mostly), family, friends etc. Curious effect of welfare payments (anything over 26 weeksof UI is welfare), it takes longer to find to find work if ever as long as it continues.

[janejoad]

11:21 PM on 11/17/2010

Wait a minute...........
My husband lost his longtime, high paying job on December 31, 2008. For 9 months he pounded that pavement until he found a job. The rate of pay was 30% less. Ok. WE can live with that for a while. EIGHT MONTHS LATER............the new job folds when the company closes doors. That was June 2010.
Because he worked for 8 months, he had to open a "new" claim, which was $300 less than the old claim, and still, today, no work. A HUNDRED + resumes out, ZERO response. My guess as to the # 1 reason? HIS AGE (53) and his SALARY HISTORY.
Unemployment paid the mortgage for the first 9 months, this time it became untenable. TODAY, I've been packing up the house. We can't pay the $1,800 mortgage and our other bills and eat too. We thought if we gave up a car we could hold on. Still no bite on a job. NOW, the house goes. I'm tired. He's tired. And then some sh*theel like you, comes along calls us a couple of deadbeats?
Don't be so quick to judge people until YOU STAND IN THEIR SHOES> FRED.

[goodmarina]

02:33 AM on 11/18/2010

first ... i am sorry for what your family must be going through

i know so many -- and what you outlined is happening to your husband (lose job, get job ... only to lose it again ... new unemployment claim, less pay, etc..) is so familiar. 

it is just heartbreaking and it shocks me to see how many are quick to make blanket statements about those who are unemployed and act as if they are total losers who have not worked a day in their lives.

the draw-dropping part is the sheer ignorance in them not realizing that you have to be "employed" in order to qualify for "unemployment benefits"

hang in there - i will say a prayer for you guys tonight.

this is not a left, right or center story.  this is an American story ... something that is happenig to so many of our countrymen.

[jkkFL]

11:45 PM on 11/17/2010

I sincerely hope your uglya$$ karma bites you in the butt Stat.

[sueinmn]

07:58 PM on 11/17/2010

Facts of American history, poverty equates high crime. More poverty will do what? Is this the type of country we want to create and deal with ?

[CPAwADD]

11:52 PM on 11/17/2010

Disparity is usually seen with higher crime rates, it is not poverty per se.

[goodmarina]

02:34 AM on 11/18/2010

crime is directly related to opportunity & provision.

somehow, your position is juxtaposed ; )

[pattileigh]

07:54 PM on 11/17/2010

If they don't extend the unemployment benefits there will be massive poverty, tent cities and protests. Most people haven't experienced this in their life times. They think it can't happen. Just read the posts here saying we can't pay forever and the unemployed are getting money for nothing. They have no clue what will happen when so many are out of work and hungry. If we can pay millions a day for war and occupy other countries we can pay unemployment benefits. If we closed military bases in other countries we'd save billions.

[Bumpkins]

07:58 PM on 11/17/2010

Over 40 million on food stamps, so they can feed themselves and family. I wish some reporters would do stories on the struggles our people are having to go through.

[Reno Fickler]

10:19 PM on 11/17/2010

The govt is training people to be poor and accept govt hand-outs. Nothing socialistic about that.

[jkkFL]

11:48 PM on 11/17/2010

Karma never misses a required opportunity.. You qualify.

[goodmarina]

02:34 AM on 11/18/2010

well ... why don't you open a business and start hiring people

it is very easy, right?

[sueinmn]

07:53 PM on 11/17/2010

McDonalds pays more than I am presently taking home but they are not hiring.

[notillegal2]

05:36 PM on 11/17/2010

Didn't CBO say that obamacare would cost less than a trillion bucks?

[Reno Fickler]

10:23 PM on 11/17/2010

You left the word after 'bucks' out. "regularly"

[TMMA]

04:45 PM on 11/17/2010

"The government announced in September that that the 2009 poverty rate had risen to 14.3 percent from 13.2 percent the previous year."

Wonder what 2010 will look like.

[Bumpkins]

07:49 PM on 11/17/2010

That is a no brainer for me. I have it from a un-named source, that once the Republicans take over in the House the Pledge document will have a step by step program for a car in every garage, and two chickens in every pot....cheer everbody. Once they are in charge we will have an agressive program to increase employment and financial reform. The poverty rate will drop by 2 percentage points by Summer.

[Figerre]

01:26 PM on 11/18/2010

and what are you smoking?

[texastrixie]

04:59 PM on 11/18/2010

You can have an agressive program to hire people, but it won't matter when you throw the elderly off social security, unemployment, and tell people that they are on their own for medical bills no matter what their circumstances.