With unemployment expected to exceed 10 percent by next year, law makers are working on a new measure that would further extend benefits for the unemployed. This is intended to fight the record number of workers who have been unemployed for six months or more, which could cause a major setback for economic recovery. For more on this, see the following article from Money Morning.
With unemployment expected to remain at its highest level in decades for at least another year, the government is considering another extension of jobless benefits to help the unemployed.
The House of Representatives will vote next Wednesday on a new measure that would extend jobless benefits for an additional seven weeks nationwide and for 13 weeks in states where the unemployment rate is greater than 8.5%. Twenty-six states and the District of Columbia meet that criterion.
If passed, the measure would affect about 300,000 people that live in those regions and are due to run out of compensation by the end of September.
“We fought hard to get the program started, and now it is clear it must be extended,” said U.S. Rep. Sandy Levin, D-MI. “The number of long-term unemployed is over double what it was in the past recession and economic conditions are worsening. Unemployed individuals and their families need federal support while they continue to look hard for work.”
The number of U.S. workers filing new claims for jobless benefits unexpectedly fell by 12,000 in the week ended Sept. 12. But the overall employment picture still remains weak. Continuing jobless claims rose by 129,000 in the week ended Sept. 5, when they were forecast to be little changed, and the national unemployment rate hit 9.7% last month – its highest level in 26 years.
The Congressional Budget Office (CBO) says unemployment will peak at 10.4% next year before receding to an average of 9.1% in 2011.
In most states, unemployed workers receive 26 weeks of benefits. Depending on where they live those workers could get federally funded extensions for a total of 79 weeks. However, a record number of workers have been unemployed for six months or more, and many others are starting to use up their unemployment benefits, their extended benefits, and even emergency payments from the government.
In addition to the 300,000 people who are set to see their benefits expire this month, the House measure would benefit another 1 million people who are scheduled to stop receiving benefits by the end of the year.
The bill is expected to meet little resistance in the Democratically controlled House, but could face stiffer opposition in the Senate.
The cost of extending jobless benefits could be offset by a one-year extension of an employer-paid federal unemployment tax that has been in place for the past three decades, CNNMoney reported.
This article has been republished from Money Morning. You can also view this article at Money Morning, an investment news and analysis site.