Long-term unemployed watch coming debate over benefits closely

Bipartisan Senate deal faces tough odds in House

March 22, 2014|By John Fritze, The Baltimore Sun

The first thing Eric Miles lost was his Jeep. Then it was the apartment that he and his 12-year-old son called home.

Since the federal government cut off jobless benefits for the long-term unemployed late last year, the 54-year-old East Baltimore man has moved in with his sister, relied on family to pay the phone bill and borrowed bus fare to go out and look for work.

"You're talking about $3.50 for an all-day bus pass," Miles said. "If you don't have the $3.50 coming in, you don't have it."

Nearly three months after Congress allowed the benefits to lapse, tens of thousands of out-of-work Marylanders are hoping that a bipartisan deal to extend the program through May will win approval. But the plan could be doomed by opposition from some conservatives, who say the benefits create a disincentive for seeking a job, as well as a national group representing state unemployment officials.

The emergency federal benefits are used by people who have run out of the 26 weeks of unemployment insurance offered by most states, including Maryland. The federal program continues the benefits for as many as 47 additional weeks; the duration depends on a state's unemployment rate. For example, in Maryland, the program offered an additional 37 weeks last year, but that would fall to 28 weeks this year if the program were reinstated.

President Barack Obama has repeatedly pressed for an extension and polls indicate a majority of Americans support it, but the Senate has failed three times to muster the 60 votes needed to advance the measure. Now opposition to the latest agreement has put prospects of approval in doubt once again.

About 1.3 million people nationwide and more than 25,000 in Maryland lost federal benefits when the program expired Dec. 28. Since then, another 12,310 Marylanders have exhausted state benefits and may have become eligible for the federal program, according to the state Department of Labor, Licensing and Regulation.

A central debate between supporters and opponents of the program focuses on its impact — whether or not the benefits encourage the long-term unemployed to find a job. Miles, for one, says program payments were a big help.

Miles said he spent 20 years operating bulldozers for Chesapeake Site Contractors before he was laid off. He has worked since then, but always at short-term construction jobs — three months here, eight months there, he said.

He said the money he received in federal unemployment — about $400 week — allowed him not only to pay the bills but also to keep looking for work. Such weekly payments are based on a percentage of how much workers previously made, up to just over $400 a week in Maryland.

"Without family, I wouldn't even have a telephone to conduct interviews," Miles said. "It's just little things that you need help with."

When he was forced to sell his truck, it made it far more difficult to show up for job interviews. "There ain't no job right across the street from me," he said.

LaShonda Armstrong, a 41-year-old Baltimore resident, is in a similar spot.

She lost her job as a manager at a Lane Bryant clothing store in August. Since then, she's moved in with her mother in East Baltimore and is burning through savings to make ends meet. She said she has sent out application after application, but potential employers simply aren't calling her back.

"The bills do not stop just because the money stops," said Armstrong, who, like Miles, has been getting help through the Mayor's Office of Employment Development. "Your life changes when your income changes."

With U.S. unemployment falling to 6.7 percent from a peak of 10 percent in the fall of 2009, some conservatives say it is time to end the program first approved by President George W. Bush at the start of the Great Recession.

The federal government has spent $226 billion on it so far.

Chris Edwards, an economist at the libertarian Cato Institute, said the benefits have little impact on the economy and wind up increasing unemployment.

"Many people tend to wait until the very end, until employment benefits run out, to make the tough decisions they need to make, like taking a lower wage or changing careers," said Edwards, who edits Cato's downsizinggovernment.org blog. "The emergency with the U.S. economy has long passed."

Edwards noted that most people out of work would continue to receive state benefits for more than six months, which he said "is a reasonable amount of time to make the tough decisions needed to find a job."

The latest proposal to extend the benefits, which is expected to advance in the Senate, would provide retroactive payments to December. Congress would offset the $10 billion cost by extending increased customs fees and allowing companies to set aside less for employee pensions, which in turn would increase profits and federal tax revenue.

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