House Speaker John Boehner is starting to sound like a broken record when he says there has been “no progress” on the fiscal cliff negotiations. But tell that to the 2.1 million Americans who could be launched over the cliff come January without the brace from the social safety net.
Unemployment insurance is on the chopping block in the looming fiscal crisis, and for those long-term jobless Americans, the dropoff from the cliff is steep. Emergency Unemployment Compensation (EUC) provides an additional federal safety net for workers who have already maxed-out their regular state benefits before landing a job. Last year, unemployment insurance lifted over 2.3 million people out of poverty, according to a study by the National Employment Law Project. More than 600,000 were children.
The November jobs report marked a four-year low in unemployment at 7.7% with the economy adding 146,000 jobs, but the “better than expected” report didn’t provide relief for the roughly $4.8 million Americans who are trapped in long-term unemployment.
And if Congress fails to reach a deal before the program is set to expire at the end of December, it will be reflected in the 2013 poverty numbers, says Greg Kaufmann, a contributor at The Nation magazine. Kaufmann shared his reporting with host Melissa Harris-Perry on Saturday, in the telling the stories of the real Americans who will be directly and immediately affected by the so-called fiscal cliff–many he says are disproportionately elderly, of minority races, or women.
“These benefits are a real lifeline for them,” Kaufmann said.
Chad Stone, chief economist at the Center on Budget and Policy Priorities, outlined a doomsday scenario for workers if Congress continues in its stalemate for 2013:
Workers who lose their jobs in 2013 would receive only regular state unemployment insurance–a maximum of 26 weeks of benefits or less in nearly every state–in an economy where jobs remain hard to find. The latest jobs report, for October, shows that 5 million jobless workers–40.6% of the 12.3 million people who are unemployed–have been looking for work for 27 weeks or longer.
According to analysis by the nonpartisan Congressional Budget Office, fully renewing the temporary benefits would cost the government an estimated $30 billion. Doing so the CBO says would “lead to more consumer spending and increased demand for goods and services which…would boost overall output and employment in the short term.”
The return on the government’s investment is felt instantly says Carmen Wong Ulrich of Alta Wealth Management. ”That $30 billion actually turns into $48 billion in terms of spending, keeping jobs…and not just their jobs, but the jobs of other workers,” Ulrich said to Harris-Perry on Saturday. “These folks are not sitting around. The jobs don’t exist.”
See below the second half of the MHP conversation.