Jobless uneasy with benefits’ end looming

If Congress can’t extend benefits, 3 million could lose unemployment assistance by March.

By Sean F. Driscoll

BusinessRockford.com

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ROCKFORD — When the calendar flips to December, L.C. Wilson will move on to the second extension of his unemployment benefits, a 13-week term that will keep money in his pocket through February.

Without congressional intervention, however, that could be the end of the line for Wilson and millions of other unemployed Americans. Although unemployment has been extended for up to 73 weeks — in addition to the 26 weeks the states provide — many of those federal extensions are set to expire Dec. 31.

People collecting unemployment on one of the four federal extension tiers will continue to get benefits until their program has run its course, but they won’t be able to move on to the next round of benefits. Without action by Congress, an estimated 1 million people will lose their benefits in January alone, according to the nonprofit National Employment Law Program.

“(It) would be devastating,” said Wilson, one of the more than 27,000 unemployed people in Boone and Winnebago counties in September. “Hopefully I’ll have a job before then. If not, it will be a setback because where would you get money unless you tapped into your 401(k)? I have some bonds I might sell, but that’s a step I’d prefer not to take.”

Hole in stimulus plan
The hitch that’s causing the problems lies in the stimulus act, which funded several tiers of unemployment extensions but set them to expire Dec. 31. Also set to expire are a $25-a-week stipend to the jobless and a 65 percent subsidy for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, also known as COBRA.

NELP estimated 30,000 workers a day will be left without benefits if Congress doesn’t pass a new law. By March, the number without federal jobless benefits could swell to nearly 3 million workers.

About 9 million people are receiving unemployment insurance, 5 million on state programs and 4.1 million on federal extensions.

Effect for Illinoisans unclear
The Illinois Department of Employment Security is working to determine how many state workers would lose their benefits, said communications manager Greg Rivara.

About 40,000 Illinoisans were in danger of losing their benefits before Congress passed the most recent 20-week extension in November, Rivara said. About 420,000 are receiving unemployment from either the state or a federal extension.

“We’re trying to determine a way we can identify (the effect),” he said. “We know that a group of people are continuing to cycle through the programs, and we can identify that most of those people are having a hard time finding employment because we watch them move from one federal extension to another.”

But it’s uncertain whether Congress will move fast enough to stop a gap from occurring in unemployment benefits.

Local legislators speak up
House Majority Leader Steny Hoyer, D-Md., said Tuesday that Congress would consider continuing the federal emergency program and other benefits included in the stimulus package as part of a bill focused on jobs. But Senate Democratic leader Harry Reid has said the Senate will finish work on health care before taking up a jobs bill, which could mean that it won’t act until next year.

Rich Carter, spokesman for U.S. Rep. Don Manzullo, R-Egan, said the congressman hopes any extension bill will include tax incentives to create jobs.

“We’re trying to introduce legislation to accelerate a tax incentive manufacturers get on anything they produce in the United States,” he said. “We want to get them some much-needed revenue so they can strengthen their businesses and maybe start hiring again.”

Carter said Manzullo has been in favor of extending unemployment benefits in the past and will continue to support them, depending on how they’re packaged in legislation.

Christina Mulka, spokeswoman for Sen. Dick Durbin, D-Ill., said the senator “has consistently supported and will continue to support extending unemployment insurance.”

The larger issue continues to be finding ways to create jobs, she said. At Reid’s request, Durbin began meeting last week with other senators, White House officials, economists and others to craft a major jobs bill, Mulka said.

Reach staff writer Sean F. Driscoll at 815-987-1346 or sdriscoll@rrstar.com.

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