State’s unemployed will be first to feel fall over the ‘fiscal cliff’
Washington — Eventually, nearly every American will feel the economic pain brought on by going over the so-called fiscal cliff, but more than 43,000 unemployed Connecticut workers would be among the first.
That’s because those long-time unemployed workers will stop receiving benefits next week unless Congress acts in the next few days.
“Both houses of Congress need to grow up and make sure 2.3 million Americans don’t lose their benefits,” said Mitchell Hirsch, an unemployed worker advocate at the New York-based National Employment Law Project.
There are both humanitarian and economic reasons to continue those benefits, Hirsch said. A sudden loss of money from Washington, which the unemployed usually spend quickly on necessities, would hurt local economies, he said.
Connecticut and most other states offer 26 weeks of benefits to the unemployed. But since the recession began in 2008, the federal government has provided an extension of those benefits, at one point for up to 99 weeks, but now 83 weeks in Connecticut.
Authorization to continue the program runs out on Dec. 31, just as a series of Bush-era tax breaks are set to expire. It would cost about $30 billion to extend the long-term unemployment benefits for another year.
The Connecticut Department of Labor says an end to the long-term benefits means 43,000 to 45,000 jobless in the state would stop receiving unemployment checks in January.
Sharon Palmer, commissioner of the Connecticut Department of Labor, said her agency warned Connecticut’s long-term unemployed by letter earlier this month their benefits may soon be ending.
“We also told them to continue to file for benefits because if Congress does act, we can send them the money right away,” Palmer said.
Since the recession began, the numbers of long-term unemployed — defined as someone who has been out of work for at least 26 weeks — has remained stubbornly high, representing about 40 percent of all jobless. The average duration of unemployment is about 40 weeks.
Palmer said a sudden end of benefits would force the longtime jobless to look for other social services to “stay afloat,” placing an additional strain on the state’s resources.
Last week, President Obama urged lawmakers to scale back ambitions for a grand bargain to avoid the dire economic consequences expected to occur when the Bush-era tax breaks expire and $500 billion in automatic spending cuts are implemented on Jan. 2. The president instead wanted Congress to send him legislation that would prevent tax cuts from expiring for all but the highest-earning Americans — and extend unemployment benefits for the long-term jobless.
But as the clock ticks away toward the New Year and the fiscal cliff, the situation in Washington remains stalemated.
The Senate is in session today. But the House has no plans to convene, following the failure last week of House Speaker John Boehner to win GOP support for legislation to prevent scheduled tax increases on everyone but millionaires.
Congressional Democrats want to extend the jobless benefits and Sens. Richard Blumenthal, D-Conn., and Joe Lieberman, I-Conn., both signed a letter urging the Senate leadership to do so.
Republicans resisted previous reauthorizations, arguing the original idea was for a temporary measure. But GOP leaders have not weighed in on the issue recently, giving some advocates for the unemployed hope.
Palmer of the Connecticut Department of Labor said she hopes Congress and the president will agree to continue both the tax cuts and the unemployment benefits for a short period of time, leaving the new Congress the tough job of coming up with a broader agreement on taxes and spending.
Nancy Carrington, president of the Connecticut Food Bank, which feeds those in need in six counties, said an end of long-term benefits would “add more people to the line” of those seeking help from her organization, a line that’s grown during the recession and from the impact of Superstorm Sandy.
“It seems to be a very cruel gesture at the conclusion of our holiday season,” she said.
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