WASHINGTON -- To prevent 2 million people from abruptly losing their economic lifeline at the end of the year, Senate Democrats have begun their push to preserve federal unemployment insurance programs.
Sen. Jack Reed (D-R.I.) is gathering signatures from his Democratic colleagues for a letter to Senate leadership urging an extension of jobless aid. Despite recent declines in the unemployment rate, the letter notes that more than 12 million Americans are still out of work, and that there are more than three unemployed people for every available job.
"In light of this unacceptable jobs situation, it is crucial that we focus on ways to get Americans back to work and that we continue unemployment insurance through 2013," the letter says. "Continuation of unemployment insurance has in the past, though often after much unnecessary delay, passed on a bipartisan basis."
Every recession since the 1950s has prompted Congress to give the unemployed extra weeks of benefits, but partisan squabbling over unemployment insurance has been a Christmas tradition during each year of President Barack Obama's first term. This year will be no different.
Last week, Sen. Jeff Sessions (R-Ala.) sent party leaders a letter demanding that the cost of continuing federal unemployment compensation for another year, which the letter put at $26 billion, be offset with cuts to other parts of the federal budget. And in response to House Democrats demanding continued jobless aid, a spokesman for Rep. Dave Camp (R-Mich.), the leader of the House committee that oversees unemployment insurance, said Congress should "carefully consider" whether another year of assistance for the unemployed is worth the money.
The benefits are part of broader negotiations over how to avert the so-called "fiscal cliff," the nickname given the moment when a host of spending cuts and tax hikes are scheduled to take effect at the end of the year. Big tax cuts enacted in 2001 and 2003 are set to expire along with a 2 percent reduction in the Social Security payroll tax paid by all U.S. workers. Congress created the payroll tax holiday in 2010 and paired it with a reauthorization of federal unemployment benefits and continuation of the Bush-era tax cuts.
Citing the boost economists say unemployment insurance delivers to gross domestic product, Sen. Dick Durbin (D-Ill.) said he favored keeping the benefits. "I would like to see that," Durbin said. "We’ve been told by those who analyze those things that it is the single best stimulus for the economy, so that is one of the areas I’ll push for."
On Tuesday, HuffPost asked Sen. Max Baucus (D-Mont.), chairman of the Senate committee with jurisdiction over taxes and unemployment insurance, whether Democratic leaders had firmed up their plans to continue the payroll tax and unemployment benefits. Baucus sounded non-committal.
"It's on the table," he said. "It should be discussed."
According to the Labor Department, slightly more than 2 million Americans are currently collecting federal unemployment insurance, which lasts for as many as 47 weeks in states with high unemployment rates. Laid-off workers are eligible for federal benefits if they still haven't found work after using up state-funded benefits, which in most states last 26 weeks. The National Employment Law Project, a worker advocacy group, estimates that 2 million will abruptly stop receiving federal unemployment checks if Congress hasn't reauthorized federal programs by Dec. 29.
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