Updated July 31 at 5:31pm

Unemployment benefits set to lapse as Congress fails to extend

Unemployment benefits for 1.3 million people in the U.S. are poised to end Dec. 28 as Democrats failed in their last-ditch effort to extend the jobless assistance before the House adjourns tomorrow.

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public policy

Unemployment benefits set to lapse as Congress fails to extend

Posted:

(Updated, 3:07 p.m.)

NEW YORK – Unemployment benefits for 1.3 million people in the U.S. are poised to end Dec. 28 as Democrats failed in their last-ditch effort to extend the jobless assistance before the House adjourns tomorrow.

Republicans who control the House refused to keep the aid flowing to the long-term unemployed without agreement on budget cuts elsewhere. Extending the benefits would cost $26 billion over two years, according to the Congressional Budget Office.

Senate Majority Leader Harry Reid today said the lawmakers won’t have a chance to act before leaving for the holiday recess. It will be the first issue taken up when Congress reconvenes next month, Reid said, and lawmakers would try to make the benefits retroactive.

“This is something we are focused on like a laser, and we’re going to continue working on it,” Reid told reporters today. “It’s been extremely difficult, procedurally, to move things along.”

The failure of Congress to agree could put a dent in the nation’s economy. The Congressional Budget Office estimates that extending the program would boost growth by 0.2 percent and add about 200,000 jobs.

“We still haven’t seen the type of employment improvement that would warrant allowing this program to expire,” said Chad Stone, the chief economist for the Center on Budget and Policy Priorities, a Washington-based group which supports programs that assist the poor. “This means real hardship for real people - but it’s also bad for the economy.”

State impact

While the national unemployment rate fell to 7 percent in November, there were still 4.1 million people, more than one-third of the unemployed, who had been out of work for 27 weeks or more, enough to exhaust state unemployment benefits. Failure to extend benefits would hit hard in states such as Nevada, Michigan and California, where unemployment remains higher than in the overall U.S.

Carlos Pacheco, a 53-year-old lab manager in New Jersey laid off in June, would be among those affected by the benefit lapse. Pacheco received what could be his final benefit check last week if Congress doesn’t agree to an extension before the House’s scheduled holiday recess after tomorrow.

unemployment insurance, Congressional Budget Office, Dean Baker, Center for Economic and Policy Research, Carlos Pacheco, John Boehner,
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