Congress went on holiday recess without extending an emergency federal aid program to America’s unemployed, set to expire on Saturday, leaving over one million people in economic dire straits.
The federal aid program, which extended $300 per week to the
long-term unemployed, helped some 1.3 million Americans and their
families make ends meet in the aftermath of the Great Recession
of 2008, described as the harshest economic downturn since the
Great Depression.
President Obama on Thursday signed a bipartisan budget deal
without guarantees on the unemployment assistance program, thus
putting himself in a weak bargaining position as he scrambles to
gain bipartisan support for extending jobless benefits.
“This morning, the president placed separate telephone calls
to Senator Jack Reed and Senator Dean Heller to offer his support
for their proposal to extend emergency unemployment benefits for
three months,” White House Principal Deputy Press Secretary
Josh Earnest said in a statement.
“The president said his administration would, as it has for
several weeks now, push Congress to act promptly and in
bipartisan fashion to address this urgent economic
priority.”
Despite the importance of the program for the 1.3 million
Americans who relied upon the cash payments, the Senate will not
hold a vote on the proposal until Congress returns to work next
month.
The abrupt termination of unemployment cash allowances - most of
which contributed to economic growth at the local level - at the
height of the holiday season is expected to have a negative
impact on the economy.
Another 1.9 million Americans are expected to lose their state
benefits before the end of June.
Across the United States, which is still struggling to shake off
the economic doldrums, the situation for unemployed Americans
varies from state-to-state.
In California, for example, the most populous US state, around
214,000 residents on Saturday will lose their cash payments,
according to the US Labor Department. In 2013, Californians
received $4.5 billion in federal jobless benefits, much of it
spent at ‘local-global’ corporations, like Walmart and
McDonald’s.
Other states which expected to take a hit this Saturday include
New York, where an estimated 127,000 will lose their benefits. In
New Jersey, 11th among states in population, 90,000 people will
not be receiving emergency aid over the holiday weekend.
Massachusetts residents, meanwhile, are expected to feel the
termination of the aid program the worst, due to the state’s
higher-than-average percentage of people who have remained
unemployed for six months or longer.
The Massachusetts unemployment rate has been on the rise, going
from 6.7 percent last year to 7.1 percent in November. The
national unemployment rate dropped from 7.8 percent in November
2012 to 7 percent last month.
The Boston anti-poverty group, Action for Boston Community
Development Inc., says 141,000 Massachusetts residents are among
1.3 million Americans losing benefits.
While critics of the emergency unemployment program, like Sen.
Rand Paul of Kentucky, say that handing out money to the
unemployed only exacerbates the problem, causing people to become
dependent upon the state for their livelihood, there has been
little debate over the $16 trillion bail out of the world's
leading banks, corporations, and governments between December
2007 and June 2010.
The bailout, courtesy of the Federal Reserve, was argued to be a
necessary move in preventing the “too big to fail”
economic institutions from... well, failing. Sadly, the same type
of logic does not seem to apply to the American people, the very
individuals who have suffered the most in the latest downturn.
At the same time, many of the biggest US corporations no longer
even pay taxes on their profits.
Citizens for Tax Justice reported in June that many Fortune 500
corporations, including Nike, Dell, Apple, Microsoft and American
Express, according to their financial statements, seem to pay
“little or no tax on their offshore holdings.”
“It’s likely that hundreds of other Fortune 500 companies are
also engaging in similar strategies to take advantage of the rule
allowing US companies to “defer” paying US taxes on their
offshore income,” the watchdog group wrote.
This development places a serious strain on federal and state
programs, some of which, like the emergency assistance program
for the unemployed that will end on Saturday, can no longer foot
the bill for their expenses.
The emergency aid program was started under President George W.
Bush as a federal mechanism to assist the millions of Americans
after their state-subsidized aid came to an end, which in most
states happens after six months.