Federal Unemployment Programs Need to be Continued

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The American Recovery and Reinvestment Act has provided numerous federal benefits to unemployed Texan workers but these funds are dangerously close to running dry.

According to a report published by the Center for Public Policy Priorities (CPPP), An estimated 20,000-25,000 Texans are expected to lose their [unemployment] benefits every week through July. By July 3 about 114,000 Texans will have lost their benefits due to the suspension of Emergency Unemployment Compensation (EUC) and Extended Benefit (EB) payments.” These programs have been instrumental in helping jobless Texans maintain their finances and provide for their families.

“All these programs in combination enables people to pay their rent and mortgage, put food on the table, buy household items that they need, all of those things. It helps keep a roof over people’s heads,” said CPPP Senior Policy Analyst Don Baylor.

“For many people its almost half of what you were earning before. It’s not a full replacement by any sense of the imagination, but it provides enough for people to squeak by.”

While these programs have been immensely crucial in keeping jobless Texans afloat, their legislative lull in Washington has been hurting those receiving aide from unemployment benefits.

“Congress has not reauthorized those programs. Since the recovery act took place, some of these things were two years long but the EUC was only for about another year. The FAC was supposed to last for the entire two years,” said Baylor.

“The FAC is still in place, but the EUC and EB programs has been phased out because Congress has been in a debate, mostly in the senate, whether or not their going to reauthorize that and whether they’re going to have to pay for it or not and if so what they’re going to off set it with. Right now there’s 2 million folks whose benefits have been cut off nationally and over 100,00 in Texas, so every week there’s more people that fall off.”

Besides these two programs, the Federal Additional Compensation program has been helpful to unemployed Texan’s by providing an extra $25 dollars in addition to their benefits received from the EUC and EB. While it doesn’t sound like much, this money has worked both as a facet for more disposable income towards unemployed persons and as stimulus money for the local economy.

“Unemployment insurance is a stimulus. An unemployed person is going to spend that money locally and immediately. The idea is that you further stimulate the economy but putting the money in the hands of the people most likely to spend it. Every dollar in UI benefits is about a dollar-fifty or anywhere up to $2.66, counting in that range how many times that dollar turns over in the economy,” said Baylor.

By cutting off federal unemployment benefits, Texas stems to lose $342.1 million dollars in economic stimulus seen in a report published by the National Employment Law Project. Both U.S. Senators Kay Bailey Hutchison (R-TX) and John Cornyn (R-TX) voted against extending federal benefits, along with 20 U.S. Texas congressmen. By this coming July 31, near 200,000 jobless Texans will have lost their benefits

“The big term issue is now half of the total unemployed, which is the highest it’s ever been since we’ve been keeping record. That’s why it’s heating a lot of people because there’s been a lot of people who have been unemployed more than six months,” said Baylor. Solid economic recovery and job prospects are dim for the rest of 2010 and those who rely on such benefits may soon find themselves in a severe financial crisis.

With an abundant amount of ARRA stimulus funds still available to Texas agencies and hundreds of thousands of unemployed Texans who face losing their homes or are having rough fiscal issues, it is crucial that Texas congressional leaders vote to reauthorize these ARRA federally funded unemployment insurance programs that will not only benefit the jobless but will stimulate the local and state economy as a whole.

 

Click here For the Center for Public Policy Priorities’ July 1 report that includes breakdown of ARRA unemployment insurance programs

Click here For the National Employment Law Project’s July 2010 report that details national unemployment data including Texas and the cumulative number of workers prematurely losing job benefits