Unemployment Benefits Extension to Run Out: A Snapshot

By Alex Johnston, Epoch Times
November 30, 2010 Last Updated: November 30, 2010

Unemployment benefits are set to run out by the end of December for millions of Americans unless Congress passes a bill by the end of Tuesday, which is the deadline to extend federal benefits.

Reports have said that more than two million Americans on long-term unemployment would be affected if it were to run out. The standard unemployment extension covers 26 weeks but Congress has passed bills that allowed for extended benefits for as many as 99 weeks.

In Nevada, which has the nation’s highest unemployment rate, 10,600 people will stop getting benefits, according to Fox.

In New York State, more than 200,000 are slated to lose extended benefits, according to WNYC.

In California, 454,000 could lose the benefits, according to Fox.

Congress, who attempted to get a bill through the House two weeks ago but failed to get a Democratic supermajority, does not have a vote on unemployment benefits on Tuesday.

Diane Swonk, chief economist at Mesirow Financial said that cutting off benefits could be catastrophic.

"Look for homelessness to rise and food lines to get longer as we approach Christmas if the situation can't be resolved,” she said, according to the Associated Press.

At the same time, cutting unemployment extensions could be harmful to the nation’s attempt to climb out of the recession.

"There will be no safety net in terms of greater job loss," Judy Conti, a federal advocacy coordinator at the National Employment Law Project, told ABC. "If the program is not reauthorized by the end of the year, 2 million will prematurely lose benefits. It could lead to great homelessness. The ripple effect would be devastating."

The “ripple effect” she is referring to means that when someone gets extended unemployment, they immediately spend money on various businesses, which goes back into the economy.

Matt Mitchell, a research fellow at Mercatus Center at George Mason University, told ABC that the extended benefits keeps unemployment high.

"The existence of unemployment insurance doubles the amount of unemployment spells that last more than three months," he told ABC.

In Louisville, Kentucky, several people had to be taken out of the Louisville Office of Employment and Training, after they received word that their benefits were slated to run dry, according to WLKY.

“Half of these people don't have any money to buy their kids any Christmas. They didn't even have Thanksgiving. It's pitiful," Izile Leucas told the station.