Federal safety net for jobless soon to be removed Congress may not extend program for a fourth time

September 02, 1993|By Knight-Ridder News Service

WASHINGTON -- Every month, a quarter of a million jobless Americans run out of state unemployment benefits. And every month, the federal government bails them out by extending the benefits for as much as another half-year.

No more.

Come Oct. 2, the federal government will stop paying emergency benefits to Americans who have been out of work for more than six months.

After that date, hundreds of thousands of unemployed workers who exhaust their state-paid benefits each month no longer will have a federal safety net to fall into.

Advocates for the jobless say the need for extended benefits is as urgent now as it was in November 1991, when the emergency action was signed into law.

Although the unemployment rate has eased slightly, the number of long-term jobless -- people without work for at least 27 weeks -- remains high.

In November 1991, when emergency payments began, there were 1.1 million long-term unemployed; today, there are 1.75 million.

"That's a very high level of long-term unemployment for this stage of a recovery," said Robert Greenstein, executive director of the Center on Budget and Policy Priorities, a Washington research group that examines issues affecting low- and moderate-income Americans.

"It underscores the anemic state of the recovery and the fact that a number of people seem to have lost their jobs permanently and are not likely to be recalled," Mr. Greenstein said.

[Meanwhile, the Labor Department said today that the number of Americans filing first-time claims for jobless benefits fell by 7,000 last week. The report said new applications for unemployment insurance totaled 324,000, down from a revised 331,000 filed during the week ended Aug. 21. The 324,000 figure was the lowest since Feb. 6.

[The less-volatile four-week moving average of jobless claims, which analysts prefer to track because it more accurately reflects the labor situation, also fell. The average totaled 327,500, down 3,750 from 331,250 during the period ended Aug. 21. It was the lowest level since September 1989, the department reported.]

Congress has extended emergency benefits three times in the past two years, most recently in February. But this time, the program's approaching expiration has drawn little attention.

"No one has focused on this at the federal level," Mr. Greenstein said. "There's not yet been a clamor on Capitol Hill to do something about it."

This summer's debate over President Clinton's budget overshadowed all other issues, including emergency unemployment, congressional aides said. But attention could quickly return to the plight of the unemployed if the jobless rate starts to increase.

Since November 1991, the government has spent $21.7 billion to pay extended benefits to 7.5 million Americans, according to the Labor Department. Currently, 1 out of 3 unemployed people draws federally paid unemployment compensation.

One of them is Jean Jennings, an unemployed office manager from the Washington suburb of Rockville, Md. Ms. Jennings lost her job in February when her division of an international corporation closed its Bethesda office.

Ms. Jennings, 55, worked for the company for 13 years and was confident that she would land another job.

"If someone told me it would take more than six months to find a job, I wouldn't have believed it," Ms. Jennings said as she waited in line one recent Monday morning at a Maryland unemployment office.

Ms. Jennings said she has sent 250 resumes to potential employers, has contacted employment agencies and has taken computer training to improve her skills. Still, no job.

Economists are calling the current economic cycle "a jobless recovery."

If Congress fails to extend emergency benefits, state governments would be able to take advantage of another federally supported program for financing extended benefits to the long-term unemployed. But only a limited number of states would qualify, and the federal government would provide only half the money.

Currently, only three high-unemployment states -- Connecticut, Oregon and Washington -- have passed the necessary legislation to apply for these extended benefits. Eleven other states and the District of Columbia, which could qualify, have not passed legislation.

One of those states, California, does not want to offer extended benefits if it means raising taxes on employers to cover the state's share of the bill. (The other states are Arizona, Idaho, Illinois, Kentucky, Maine, Maryland, Nevada, New Jersey, South Carolina and West Virginia.)

"A further tax on employers isn't the best way to go," said Anita Grandrath Gore, speaking for the California Employment Development Department. Last year, Gov. Pete Wilson vetoed legislation that would have authorized the state to pay extended benefits if the federal emergency program ends on Oct. 2.

With a jobless rate of 9.8 percent, California has the second-highest unemployment rate in the country. Ms. Gore said the burden for paying for extended benefits to the long-term unemployed should remain with the federal government.

But even if Congress decides to act immediately to help the long-term jobless, it might be more difficult this time to find money for emergency benefits.

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