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The Fed Fails to Pass Unemployment Extension for the Jobless

The Fed Fails to Pass Unemployment Extension for the Jobless

More than 1.7 million Americans will see their unemployment benefits expire when the Senate failed to move forward on a three-month extension of assistance for the long-term unemployed, reported by The New York Times on February 6th.   This move will likely leave Congress to also not approve the extension undercutting a major aspect of President Obama’s economic recovery plan.

 

It all came down to how to pay for the extension which would cost over $6 Billion.  President Obama has repeatedly pressed Congress to extend the program, an emergency measure enacted during the recession which at one time was extended as high as 99 weeks.  Employers through tax payments are responsible for up to 26 weeks while the federal government has foot the bill for the additional weeks throughout these extensions.   Unfortunately, there are numerous states (Ohio, Kentucky, & Indiana included) that still owe millions on federal loans that the President’s Administration provided when their state unemployment fund became depleted during the recession.   The fed is ordering these loans to be paid back by 2016 or the states will have to pass on huge unemployment tax increases to employers.

 

With the deficit every growing and the large number of federal loans to the states still outstanding, some of the more conservative republican members of the House said the extension would only create more debt for future generations to deal with, mentioned in The New York Times Article.

 

If you have any questions about this information or about how Matrix Unemployment Cost Management can help you reduce your unemployment costs, please contact Ken Kruse, at  513.351.1222 or via email kkruse@matrixtpa.com