Unemployment Benefit Extension Clears First Hurdle
The U.S. Senate may have secured the necessary support to move forward with a vote on a three-month extension of unemployment benefits, but it still needs to reach agreement with Republicans and find $6.5 billion to pay for it.
Regardless of the details, U.S. Sen. Richard Blumenthal said Tuesday’s vote means that “Congress is listening.”
“Unemployment insurance is a crucial lifeline that allows millions of unemployed Americans in Connecticut and across the country to keep a roof over their heads, clothes on their backs, and food on their tables,” Blumenthal said. “My hope is Congress will fight for these Americans — as I’ll continue to do.”
Last week, Blumenthal joined two unemployed women in Hartford who told stories about how difficult it is to find a job. On Tuesday, Moodus, Conn. resident Katherine Hackett introduced President Barack Obama at a White House press conference.
In his remarks to reporters, Obama warned that Tuesday’s vote was only the first step toward restoring unemployment benefits for 1.3 million Americans.
“All they’ve agreed to so far is that we’re actually going to be able to have a vote on it,” Obama said. “They haven’t actually passed it. So we’ve got to get this across the finish line without obstruction or delay.”
The partisan gridlock in Washington didn’t magically disappear with the start of the new year.
“Looking ahead, House Leadership cannot hold the American people hostage as this measure advances,” U.S. Rep. John B. Larson, a Democrat from East Hartford, said Tuesday. “In the depths of this cold winter, we must vote to extend benefits that are morally right and economically sound to those who need our help.”
There are more than 22,000 Connecticut residents who lost their unemployment benefits on Dec. 28. Another 3,500 were informed last week that they may qualify for state unemployment benefits even though the federal benefits had expired.
Larson said his office has been fielding calls from constituents across the First Congressional District who stand to lose their unemployment benefits. Without the federal emergency benefits, Connecticut residents only receive 26 weeks of unemployment.
Who will pay for the extension?
Even though workers will no longer be receiving the federal emergency benefits, employers will still be paying a hefty price as the state looks to pay back the federal government for the money it borrowed when the Unemployment Trust Fund became insolvent on Oct. 31, 2009.
Employers have been paying a special assessment of about $15 for every unemployed worker in an effort to pay down the more than $575 million the state borrowed from the U.S. Department of Labor.
The state does not allocate money to the fund. It’s supported solely by businesses, which means employers will be on the hook for the special assessment for the next few years. That’s on top of the regular unemployment tax they pay to the state.
“Current economic projections suggest that we will not be in a position to pay off our federal loans in full for at least the next two to three years,” the Connecticut Department of Labor states on its website.
It’s unclear if extending the benefits would force the special assessment to increase since it’s unclear how Congress plans to pay for an extension.