Here’s a staggering thought: Approximately 2.1 million Americans are set to lose their extended unemployment benefits on December 29 if the folks in Washington don’t renew them. This is part of a package deal related to tax increases and spending cuts better known as the fiscal cliff.
That’s not all — as per the National Employment Law Project (NELP), an additional 930,000 Americans are going to run out of unemployment insurance early in the new year when their 26 weeks expire. (During the recession, the federal government provided up to 73 weeks of jobless benefits in addition to the 26 weeks most states were able to provide.)
Judy Conti, the federal advocacy coordinator at NELP, told USA Today, “Congress needs to see its way to reauthorize this program so it doesn’t lapse. It’s the middle of winter, it’s the only income some people have, it keeps their homes heated, roofs over their head, and it also allows them to feed their children.”
As per the piece, Conti has grown more confident that Congress and the White House will come to an agreement to renew the emergency unemployment benefits for another year. That said, if an agreement isn’t resolved until next month, people who are impacted may endure a few weeks of hardship. (It should be short-lived because benefits would probably be implemented retroactively.)
The Congressional Budget Office estimated it will cost about $30 billion next year; this is in comparison to the $115 billion the government would lose in revenue if it extended a payroll tax holiday.
In fact, Mark Zandi, chief economist of Moody’s Analytics, revealed in the piece that every dollar an unemployed person receives results in $1.42 in economic output since the unemployed population typically spends practically all of their payments. Essentially, it sounds like it boosts the economy in a positive direction.