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DOL's Perez says EUI extension stops slide from 'desperate to destitute'

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For the 128,000 Ohioans whose federal emergency unemployment insurance died suddenly on Dec 28, when Congress adjourned and failed to reauthorize financial help for 1.3 million Americans, the message that a bipartisan bill that would add three additional months of payments to their now exhausted benefits will be introduced next week in congress offers them hope their plight to find work in a job market far from healthy won't be ignored or forgotten.

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Secretary of Labor Thomas Perez and Council of Economic Advisers [CEA] member Betsey Stevenson held a conference call Friday afternoon with invited regional reporters to discuss the economic benefits of extending emergency unemployment insurance through 2014.

Failing to pass legislation to extend these benefits will continue to cut off a vital lifeline for millions of Americans who depend on these benefits, the White House said. By temporarily extending emergency unemployment insurance for three months, the bipartisan Reed-Heller bill to be introduced next week would provide benefits for over 2 million Americans when they need it most.

Congress should have done the "right, smart and fair thing" by extending these much-needed benefits, Perez said today, adding that when it failed to do so before Members left Washington at Christmas for home, it forced former workers hunting for a job and their families to choose between "food and medicine ... paying rent and eating," sending them from "hardship in December to catastrophe now."

The Reed-Heller bill, Perez said, has President Obama's support because it provides critical relief and stimulates the economy. The president will hold an event next week with people who have lost their benefits even as eight million jobs have been created over the last 45 consecutive months. Perez cited two instances during the administration of George W. Bush, when the unemployment rate was 5.6 percent, 1.4 percent lower than today, that similar EUI help was dispensed. With long-term workers now averaging 17.1 weeks of unemployment with a national UR of 7 percent, DOL's leader said it would be unprecedented for Congress to fail to act.

Sen. Majority Leader Harry Reid [D-Nevada] has indicated he'll include extending these benefits in Senate business next week. Ohio's senior U.S. Senator is also on-board with this effort.

These benefits start after a jobless worker exhausts the first 26 weeks of state-funded unemployment. Buckeye workers are eligible for a maximum of 63 weeks of benefits, 37 of which are paid for by federal funding Congress must approve but didn't before they left for home in late December..

Asked by CGE to comment on the proposal, Sen. Sherrod Brown (D-OH) said he'll continue the fight to extend emergency unemployment insurance. "While the jobless rate is decreasing, it is still too high to deny 1.3 million hard working Americans, including more than 128,000 Ohioans, benefits that would help pay the bills and put food on the table for them and their children," he said. "Following the holiday season, we should come together to support those who are still struggling after the worst economic crisis since the Great Depression."

Ohio's other U.S. Senator, Republican Rob Portman, elected in 2010, has concerns that extending jobless benefits will add to the deficit, which by all accounts is falling fast. This proposed 3-month extension could add to the deficit if a way to fund it isn't found, which the Reed-Heller bill is silent on. But Perez said that issue, always a bone of contention between Republicans and Democrats, should be addressed later. Democrats have proposed funding the three-month extension with cuts to agriculture subsidies.

"My concern is the number of Ohioans who have lost their jobs and how to get them back to work," Portman wrote to the Cleveland Plain Dealer. "I'm willing to consider any credible proposal the president or Democrats in the Senate put forth to extend unemployment benefits, so long as those benefits address job creation and are paid for so we don't add to our nation's burdensome debt."

The bill's authors have not proposed any cuts to the federal budget that would pay for the extension. The bipartisan legislators want more time to find the means to pay for a full-year renewal of the program. One strategy is to eliminate certain corporate tax breaks, but Republicans like Portman have resisted that in the past.

The cost of the program for the first three months of 2014 is estimated by Reed's office to hit $6.5 billion. A full year cost is about $24 billion, the same amount Republicans cost the federal government when they shut it down for 16 years in October.

Stevenson drew parallels with the Great Depression. The Bureau of Labor Statistics says there are 2.9 unemployed workers for every job opening, far lower than the seven people who looked for a job in the 1930s, but a number that remains trouble going forward. Despite progress made since 2008 by the White House, she called today's long-term unemployment rate "unreasonable and unconscionable high."

Perez took aim at some Republicans who are opposed to extending federal jobless benefits because they believe denying them is motivation to find a job. "These programs don't get in the way of people looking for work but help them," he said, noting that their challenge is not laziness but finding jobs where they don't exist or aren't plentiful. He called on Congress to continue its long tradition of bipartisan support to continue the benefit program, a key part of the social safety net.

Ohio worker plight portrayed

In Ohio, the battleground state the president won for the second straight time last year even though local offices and the General Assembly are controlled by Republicans, ending federal aid means 20 percent of jobless workers will receive unemployment benefits.

Policy Matters Ohio, an economic think tank based in Cleveland, released a report today that said with the expiration of federal unemployment benefits on Dec. 28, just one out of five unemployed Ohioans will now receive benefits. According to its report, that share is as low as it has been any year over the past 30 years.

Since June 2008, the federal government had provided additional unemployment compensation after the end of regular state benefits, which in Ohio and most states last 26 weeks. Long-term unemployed Buckeyes could receive up to 37 weeks in federal-paid benefits.

"Congress should act now to restore federal benefits, which have not previously been withdrawn when the national unemployment rate was this high," said Zach Schiller, study author and Policy Matters research director. "This will not only aid the families of unemployed Ohioans, but the economy as well."

Schiller said that until the program ended, more than 36,000 Ohioans had been receiving the additional federal benefits, while another 1,800 whose state benefits expire would become eligible for the program each week.

Stevenson, a CEA Member and economist and Associate Professor of Public Policy at the University of Michigan Gerald R. Ford School of Public Policy, told reporters that even though jobs have been created over the last 45 straight months , creating a stronger economy for this year, the long-term unemployment rate of 2.6 percent is more than double the one percent in average times. By failing to remedy the situation, Stevenson said estimates of job losses of about 240,000 isn't a fantasy. Another two-tenths percent of GDP growth could also be lost.

Perez linked poverty rates to failing to extend the benefits program and made a case that raising the minimum wage and investing in workforce skills development will eat away at the growing economic inequality President Obama has said is unfinished business for his administration. "Raising the minimum wage will help people at the bottom," he told reporters. Over the years since 1979, he said, worker productivity has gone up 90 percent but real wage growth has only gone up about 2 percent. Since that time, he said, people are "working harder for lower wages ... the best way to grow the economy is to grow wages ... put money in people's pockets."

The news article DOL's Perez says EUI extension stops slide from 'desperate to destitute' appeared first on Columbus Government Examiner.

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