06/16/2011 01:39 pm ET | Updated Aug 16, 2011

Pennsylvania Unemployment Deal Will Avert Benefits Cutoff For 45,000

Pennsylvania lawmakers have struck a deal that would prevent 45,000 jobless Pennsylvanians from abruptly losing their unemployment benefits next week. The agreement ends the latest in a series of ideological skirmishes across the country over how much government should help people who lose their jobs because of economic factors beyond their control.

While the new compromise bill would forestall a sudden loss of benefits, it would also make Pennsylvania's unemployment compensation program a bit stingier in the future, according to a summary of the bill. For higher earners, it freezes the maximum benefit rate at $573 in 2012 and slows future benefit growth, and it limits benefits for people laid off with severance packages. For low earners, it requires them to have worked longer and to have made more money to be eligible for benefits in the first place. It tightens work-search requirements for all jobseekers.

"I don't like the fact that we're compromising the folks at the bottom to make this deal," said Sharon Dietrich of Community Legal Services, a nonprofit that advocates for the legal rights of low-income Pennsylvanians.

On the other hand, Dietrich said, "It could certainly be worse."

Another proposal on the table would have disqualified people from benefits if they quit their jobs for compelling reasons (like childcare or fleeing domestic violence, according to Dietrich) or if they're fired for accidental misconduct instead of just willful misconduct. Some Republicans also pushed a provision that would have changed the formula for calculating benefits in such a way that would have saved $463 million a year by drastically reducing benefits for many claimants.

The bill preserves Pennsylvania's eligibility for the Extended Benefits program, which provides either 13 or 20 weeks of jobless aid in states with high unemployment rates. Pennsylvania lost eligibility for the program on June 11 because lawmakers failed to conform the state's laws to a new federal law that activates the benefits based on the unemployment rate over the past three years.

When the U.S. Congress reauthorized federal extended benefits in December, federal lawmakers told states they'd need to tweak their laws to remain eligible for the final regimen of aid. Twenty-six states have taken Congress up on the offer, most of them doing so without any controversy. But Pennsylvania is one of a handful of states where keeping the federal dollars became leverage for proposals to curtail state spending on the jobless.

The Extended Benefits program kicks in for jobseekers who use up 26 weeks of state benefits and up to 53 weeks of federal Emergency Unemployment Compensation. Both EB and EUC will expire at the end of the year. Yet lawmakers in Michigan, Missouri, Florida and now Pennsylvania have said they would only act to preserve the temporary federal benefits if the state benefits are made less generous -- permanently.

In Michigan and Missouri, the unemployed will get only 20 weeks of state benefits, an example that South Carolina may follow. In Florida, jobseekers will get as few as 12 weeks of aid.

In each of these states, lawmakers have said the unemployed have had it too good with federal extensions that provide nearly two years of checks, that states can't afford their portion of the benefits any more and that it's time to coddle businesses instead of the jobless. (The Pennsylvania Chamber of Business and Industry has lobbied in favor of the proposed reforms. Unemployment benefits are funded with taxes on businesses.)

Pennsylvania state Rep. Scott Perry (R), a lead proponent of rolling back the state's relatively generous unemployment laws, told HuffPost the overly kind formula for calculating benefits allowed workers to abuse the system by quitting after working just three months and taking a paid vacation the next nine. "We have people that might work only one quarter of the year and are making more on unemployment than somebody that works all year long at a sustained job," he said. "How is that fair?"

Many of the provisions of in Pennsylvania's new bill came from Perry, though his proposal for altering the benefit formula to prevent the jobless from gaming the system was left out. He pushed similar reforms in 2010 to no avail. Even though the national unemployment rate has barely fallen since the peak of the recession, it's gotten easier since then for opponents of generous jobless aid to make their case.

The Pennsylvania House of Representatives will pass its compromise bill on Thursday and the Senate will pass it on Friday, according to Bill Patton, a spokesman for House Democrats. The bill would save the state $114 million a year.