Fed Jobless Benefits Program Expires Saturday

By Jim Burns | July 7, 2008 | 8:20 PM EDT

(CNSNews.com) - American workers who have been unemployed for more than six months face a Saturday cut-off of their benefits with the expiration of a federal program that Congress was unable to extend before it adjourned for the year.

However, there is better news concerning recent layoffs. The Labor Department reports new claims for unemployment benefits are falling.

In its unemployment insurance weekly claims report released Thursday, the department said new claims fell to 378,000 for the week ending Dec. 21. The previous week saw 438,000 new claims. The claims numbers are considered a rough indication of the number of layoffs now taking place nationwide.

Georgia, Pennsylvania, New York, California and South Carolina experienced the largest drops in new jobless claims. But, several states -- North Carolina, Michigan, Texas, New Jersey and Kentucky - witnessed increases in the claims.

Workers who have used up 26 weeks of state-funded unemployment benefits have also been able to take advantage of the federal Temporary Emergency Unemployment Compensation (TEUC) program, which provides an additional 13 weeks of benefits.

The TEUC is currently supplying 780,000 workers with benefits, according to the Center on Budget and Policy Priorities, all of whom will see their benefits cut off Saturday. The center also expects another 95,000 workers each week will run out of the normal 26 weeks of jobless benefits.

Before Congress adjourned, the Senate passed a $5 billion plan to extend benefits an additional 13 weeks for people currently receiving them through March 2003. The House passed a $900 million plan calling for five extra weeks of jobless benefits for workers in states with the highest unemployment rates. The two sides failed to resolve their differences.

President Bush wants Congress, soon after it convenes next month, to work out a compromise.

"These Americans rely on their unemployment benefits to pay for the mortgage or rent, food and other critical bills," said Bush in a Saturday radio address earlier this month. But he did not indicate what type of unemployment package he would support.

The Center on Budget and Policy Priorities Thursday criticized Congress for adjourning without extending the unemployment benefits.

"It shouldn't depend on the number of new people that are currently being laid off. It should depend upon what is happening to long-term unemployment. Long-term unemployment is still increasing," said Wendell Primus, the center's director of income security.

Primus believes the unemployment extension program should continue for many months to come because "when we have historically shut these programs off in the past, long-term unemployment had been declining typically for a year or two years before we ended the program."

"Right now, we (the United States) are still at an unemployment rate of six percent, which is the peak for this recession. We probably should have that decline to at least four or five percent before we shut this program off," Primus concluded.

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