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October 20, 2014

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Also teetering on the cliff: An extension of emergency unemployment benefits

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Steve Marcus

A man fills out paperwork at the Job Connect offices on Maryland Parkway Tuesday, March 27, 2012.

If there’s no deal on the fiscal cliff, it isn’t just working Nevadans who will need to worry about a hit to the pocketbook.

Unemployed Nevadans also will have to brace themselves for the chance they could lose their emergency benefits.

Though the "fiscal cliff" discussion has focused on tax rates and sequestration, unemployment insurance could be on the chopping block as lawmakers work out what tax programs will be extended and what spending programs will be scaled back to keep the economy from contracting.

Emergency unemployment benefits were last extended at the end of 2011, along with an extension of payroll tax cuts that lowered the amount workers paid into the Social Security coffers from 6.2 percent to 4.2 percent.

Now those two program extensions are set to expire at year’s end along with the latest extension of income tax rate cuts, just as across-the-board government spending cuts are set to go into effect.

So far, unemployment insurance hasn’t come up for much discussion — which may be a good thing. No one is speaking up for unemployment insurance, but no one is calling for it to be axed.

Then again, not every proposed solution to the fiscal cliff extends unemployment benefits at their current level, or even at all.

President Barack Obama speaks during a campaign event Wednesday, Oct. 24, 2012 at Doolittle Park. An estimated 13,000 turned out for his ninth visit to Nevada this year.

President Barack Obama speaks during a campaign event Wednesday, Oct. 24, 2012 at Doolittle Park. An estimated 13,000 turned out for his ninth visit to Nevada this year.

On Wednesday, President Barack Obama’s advisers listed the absence of unemployment insurance as one of the reasons they would recommend he veto House Speaker John Boehner’s latest offer on the fiscal cliff: a bill that would allow tax rates on incomes of more than $1 million to rise.

That bill makes no mention of unemployment benefits — an extension of which Obama insisted be part of any fiscal cliff package Wednesday.

“It would cut off a vital lifeline of unemployment assistance to 2 million Americans fighting to find a job just a few days after Christmas,” White House Communications Director Dan Pfeiffer said.

Almost all of Nevada’s Washington lawmakers are in favor of extending unemployment benefits at their current levels.

"Congresswoman (Shelley) Berkley continues to support extending unemployment compensation for Nevadans who will lose their benefits if nothing is done before the end of 2012,” Berkley spokesman David Cherry said. “These are families in Las Vegas and other Nevada communities who are trying to celebrate the holiday season while also worrying about how to pay next month's bills.”

“Providing assistance to those still looking for work is an important component of our economic recovery, and I support a continuation of that program,” Senate Majority Leader Harry Reid said in a statement.

“I’ve supported and continue to support the extension of unemployment benefits,” Sen. Dean Heller said.

“Congressman (Joe) Heck could support a package allowing people in states with the highest unemployment levels who have recently gone on unemployment to collect the benefit for the current maximum amount of weeks,” Heck spokesman Greg Lemon said.

Mark Amodei

Mark Amodei

The only Nevada lawmaker who demurred somewhat was 2nd Congressional District Rep. Mark Amodei.

“If you look at the average length (of time) they stay on unemployment in Nevada, the number of weeks we cut it back to was still more than the average stay in Nevada,” Amodei said. “I think you could cut it back significantly and still take care of Nevada people.”

Nevadans are currently eligible for a maximum of 73 weeks, 47 of which fall under the federal government’s emergency unemployment benefit program. Earlier this year, the Nevada Department of Employment, Training and Rehabilitation reported that the average Nevadan stayed on unemployment benefits for about 44 weeks, a number staff there estimates has fallen somewhat since.

But, as Amodei pointed out, “if we hit the cliff, it goes back to 26 weeks” — a maximum figure that would threaten to leave some of Nevada’s approximately 36,000 recipients without any income.

Nevada benefits are calculated as up to 50 percent of the wages a jobless worker was earning at their last place of employment, with a maximum weekly benefit of $398. Nevada DETR Unemployment Program Deputy Administrator Kelly Karsh said that runs up a tab of about $9.5 million per week.

Despite the cost, “it’s a successful program, and it gets money flowing back into our economy,” Karsh said.

But it would be impossible for the state to make up the difference of lost benefits if the federal government stops footing the bill for its portion. The cost of any emergency unemployment benefits beyond the first 26 weeks is entirely carried by the federal government. Even if Nevada wanted to expand its unemployment coverage, it would be hard-pressed to come up with the funds: Nevada is still paying off a massive debt owed the federal government for funds the state borrowed to cover its 26-week obligation to the unemployed during the worst of the recession. Once more than $800 million, in September 2013, that debt still will be a whopping $540 million.

Because the federal government covers the cost of emergency unemployment insurance, neither Nevada’s debt nor its unemployment payment obligations increase if the federal government fails to pass an extension of emergency benefits.

Luckily, the fate of those benefits is not inextricably linked to the fate of the fiscal cliff bill.

Congress could pass an extension of unemployment benefits as a standalone bill, or in conjunction with other, small fiscal programs that are about to expire, such as the sales tax deduction or the deduction to waive forgiven mortgage debt from being taxed as income.

Architects of a bill to extend those smaller provisions have hung back for the past few weeks in an effort not to hamper or distract from the ongoing fiscal cliff negotiations.

If those negotiations fail to produce a deal, that “tax extenders” vehicle could be the best bet for keeping out-of-work Nevadans’ unemployment payments flowing uninterrupted.

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  1. To ask a Tea/Republican Party member anything about unemployment is ludicrous. They have decided time and time again to blame the laid off unemployed who had their jobs outsourced to China for sucking up money, they're a waste of humanity, not my fault they can't get a job at McDonald's, don't pay them, don't extend anything, blah blah woof woof.

    These same politicians always scream those on unemployment are lazy, just sitting on couches eating cheetoh's and drinking beer and watching television day in and day out and ain't looking for a job...but they shoot down President Obama's jobs act bill, any infrastructure spending and on top of that blame all the evils of society on the stimulus and this spending needs to stop. They demonize for not having a job, but do nothing to help America get out of the economic doldrums we're in and offer legislation that would put anyone to work at all.

    Lemme tell you neo-conservatives something. Especially the ones who post here continually with their insane blather.

    And it's this.

    In the election cycles of 2008, 2010 and 2012, I used my power.

    The vote.

    And I voted straight Democratic Party ticket each time.

    The election cycle for 2014 is gonna be no different.

    Because I want to utterly DESTROY this complete joke of a political party called the Tea/Republican Party.

    And I have met with success. Tea/Republicans all over this nation are losing power because of their draconian and out of touch ideas. I am happy to contribute to their complete irrelevance. Hopefully for a few generations to come.

    The continual attacks against the middle class and painting them as the enemy in every single thing is gonna stop. People are getting sick and tired of being blamed for everything. And all they are guilty of is trying to survive and make a living. You keep painting everyone as bloodsuckers, it's definitely going to backfire.

    It's gonna take a few more election cycles, but I, as well as Nevada and the nation, will succeed the complete obliteration of the Tea/Republican Party.

    There is a wave right now. Not only in Nevada, but nationwide. Sick and tired of the constant finger pointing by the GOoPer Party of Complete Debacle all the time. They do nothing but blame, block, and bluster.

    I'm gonna fix it.

    And I know a lot of other people are tired of it too.

    So, keep it up, Tea/Republicans. You are continuing to contribute to your complete and utter self-destruction by wholeheartedly participating in continual over the top rhetoric. Don't blame me when nobody except for the rich votes anymore for the stupidity that gets no one anwyhere.

    To put anyone from the Tea/Republican Party in charge of anything is pretty much the same as putting Godzilla in charge of Tokyo.

  2. " Berkley spokesman David Cherry said. "These are families in Las Vegas and other Nevada communities who are trying to celebrate the holiday season while also worrying about how to pay next month's bills."

    Most of us who do work still worry about paying next months bills....give me a break.

    Despite the cost, "it's a successful program, and it gets money flowing back into our economy," Karsh said.

    Well then every working person should quit working and go on unemployment, then our economy should really take off.

  3. True but does anybody think any Congressional rep would vote for ending emergency UC? So as we conveniently go over the cliff, we get the results no politician is willing to verbally support.

  4. Comment removed by moderator. Inappropriate

  5. If not for the greed of any corporation.....nobody would have a job.

  6. Bill Clinton told us in his commercials for Obama that everthing was better under him than Bush, so let the fiscal cliff come, according to Bill it will be better then what we have now. I think 26 weeks is plenty of time to find a job, it never took me more than 1 week to get one in my life, of course I wanted fo work and had no check from the goverment coming in. The worst of the recession is over, people have to man up and take what they can to support thier family, better jobs will come with the ambition they show. Maybe the illegal workers will get displaced, then the goverment can send them checks! Enough is enough, kill the UI extensions and make people go back fo work, even if it is at 1/2 the pay they used to make, as it is the same as the check they get for doing nothing...wait, maybe that is the problem, the check for doing nothing is to much for to long. There is a job for every abled body person right now in the USA. A JOB, it pays money and puts an illegal worker out of work, what could be a better solution to 2 very big problems!!
    Oh wait, cry me a river we can not ask people to degrade themsleves to take a lessor job at a lessor pay then they had, so let's pay them not to work and hope a higher paying job comes along... is that the Obama way of thinking?

  7. So Bob, is any of this spending about "helping" or assisting those in need? UI to end abruptly. Some of the refundable credits to end abruptly--with no media coverage and seemingly not considered in negotiations. Therefore we might consider that it's not about what citizens need but about the politicians. Four years to do something, to do anything, and NOTHING. Sure seems like sequestration is the grand design and enacted to take effect--kick part of a can down the road. We must deal with deficit spending not just slowing the acceleration of the anticipated increases in spending. How else could Congress or a POTUS get defense dpt. cuts? How else a cut in social welfare spending via the tax code? How else finally saying "no" to the unemployed. We never did get any jobs programs or realistic retraining for blue collar workers. Just left to our own devices. Ah well. Perhaps a change in course now to less spending means less-severe Greek-type crisis in the U.S. in 2019.