Tags: jobless | benefits | cut | GDP

Long-Term Unemployed Face December Benefits Cutbacks

By    |   Tuesday, 03 December 2013 07:24 AM

Federal jobless assistance for the long-term unemployed could end in December, affecting about 1.3 million Americans, unless Congress acts once again to extend the benefits, USA Today reported.

The holiday-season cutback follows closely on recent reductions in food stamps benefits.
An estimated 850,000 additional Americans would run out of long-term unemployment benefits by March 2014.

"There's a view . . . that it would be too heavy a blow both to the economy and to struggling unemployed families to have both food stamp benefits and unemployment benefits all (be cut) within two months of each other," said Bob Greenstein, president of the Center on Budget and Policy Priorities.

Editor’s Note:
Obama Donor Banned This Message (Shocking)

Following the economic meltdown in 2008, the federal government began providing up to a year or more of additional emergency benefits to supplement the 26 weeks of unemployment benefits most states provide, according to USA Today.

The provision has been renewed each year since then, but was scaled back with the fiscal cliff deal last January, and now could end totally.

Mark Zandi, chief economist at Moody's Analytics, estimated the jobless benefit cutback would reduce GDP in 2014 by 0.15 percent, since the unemployed tend to spend nearly all of their payments.

Zandi predicted it is less likely the extended benefits would be renewed again this year. The U.S. job market has improved, with the official unemployment rate declining to 7.3 percent in November from a high of 10 percent in October 2009, but long-term joblessness has been more persistent.

The New York Daily News reported a higher estimate for the impact on GDP if the long-term jobless benefit is not renewed. The newspaper said JPMorgan predicts it would slice almost a half percentage point off of GDP in the first quarter of 2014.

The Economic Policy Institute projected the impact of the cut would cost 310,000 jobs in 2014.

In an editorial, The Daily News said, "Washington's collective failure to embark on a job-creation program after years of high unemployment and forced part-time labor has been a national disgrace. The enduring crisis offered only the weak salve of jobless benefits."

Congressional advocates of extending the program, many of them Democrats, argue it has been effective in preventing a deeper, longer recession, NBC News reported.

But opponents of another extension, many of them Republicans, maintain that the extended benefits encourage job seekers to turn down job offers while holding out for a better one.

A team of economists from the University of Pennsylvania, University of Oslo and the Federal Reserve Bank of New York concluded in a research paper for the National Bureau of Economic Research last month that "most of the persistent increase in unemployment during the Great Recession can be accounted for by the unprecedented extensions of unemployment benefit eligibility."

Editor’s Note: Obama Donor Banned This Message (Shocking)

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Economy
Federal jobless assistance for the long-term unemployed could end in December, affecting about 1.3 million Americans, unless Congress acts once again to extend the benefits, USA Today reported.
jobless,benefits,cut,GDP
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2013-24-03
Tuesday, 03 December 2013 07:24 AM
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