Only after Steve Lovig performed the tough duty of laying off thousands of workers for an education company did the ax come for the human resources executive himself in March.
The 55-year-old Canton man had put aside a year’s worth of income to sustain his family through lean times, but with his 18-year-old twins starting college, he’s not sure how he will make ends meet beyond this month. That’s because a $408-per-week lifeline from the federal government in the form of unemployment insurance benefits stopped for Lovig and 37,902 other Georgians on Dec. 28.
The U.S. Senate has scheduled a procedural vote today on whether to bring back the benefits for three months for an estimated 1.3 million Americans. Many Republicans – including Georgia's senators – oppose the Democrat-pushed bill because they want its $6.4 billion price tag to be offset with cuts elsewhere, which Democrats say should not be required in an emergency such as this.
Georgians now are eligible for a maximum of 18 weeks of state-based unemployment insurance. Congress typically enacts extended federal benefits during recessions, and the expired benefits ran for a maximum of 47 additional weeks.
While the economy is showing improvement, unemployment rates remain stubbornly high. Georgia was at 7.7 percent in November, as the nation stood at 7.0 percent.
Lovig said it “chapped my backside” to read arguments that the benefits prolong unemployment. His message to Washington is that he has been relentlessly applying, interviewing, networking and volunteering for the past nine months – as have many of his out-of-work compatriots.
“We’re not just sitting on our duffs waiting to collect a little bit of money from the federal government,” Lovig said.
But a weekly check is enough to dissuade some unemployed people from taking certain jobs, economists say.
“When you’ve got a year and a half worth of extended benefits, it encouraged workers to delay the transition to broaden their job search to less than ideal jobs,” said James Sherk, a senior policy analyst in labor economics at the conservative Heritage Foundation think tank. “It’s causing people to look too long for jobs they are less likely to find.”
Michael Strain, of the right-leaning American Enterprise Institute think tank, argued in favor of bringing back the extended benefits because he said removing them would make more people drop out of the labor force altogether – as people are required to look for work to receive the benefits.
“If you look at the economy and the labor market you’re forced to conclude it’s still tough out there,” Strain said. “It’s still hard to find jobs.”
North Carolina provides a test case, as it cut off federal benefits when it drastically scaled back its unemployment program in July.
The state's unemployment rate has declined dramatically in the ensuing months, from 8.8 percent to 7.4 percent — double the drop in the national rate. But the drop is mostly attributable to a dwindling labor force. The actual number of employed people in North Carolina initially shrank before rebounding somewhat in November, according to federal employment data.
Sherk, of the Heritage Foundation, pointed out that the state’s labor force was declining before the benefits cutoff and that North Carolina’s employment-to-population ratio rose.
Before Congress left town for the end of the year, the White House and Congressional Democrats made an 11th-hour attempt to put an unemployment benefits extension into a bipartisan budget deal, but the effort failed.
Majority Leader Harry Reid, D-Nev., vowed a vote on the Senate’s first day of work in 2014, and Congressional Democrats and the White House continued to apply public relations pressure over the holidays. President Barack Obama is inviting people who lost the benefits to the White House on Tuesday in an event designed to prod Republicans.
The three-month extension is co-sponsored by Nevada Republican Dean Heller, and a handful of his GOP colleagues will have to join him to clear today’s 60-vote procedural test.
Georgia Republicans Saxby Chambliss and Johnny Isakson have declared their opposition.
“If it’s not paid for, I don’t know how you can support it,” Isakson said.
That objection is shared by House Speaker John Boehner, R-Ohio, meaning even if it passes, the Senate plan faces tough odds in the Republican-run House.
On a conference call with reporters Friday, House Minority Whip Steny Hoyer, D-Md., said he would prefer not to find an offset for the cost.
“We believe that this continues to be an emergency situation and ought not to be offset,” Hoyer said. “What is the offset that they’re willing to take? What we’ve seen is the offsets have largely been directed at other working Americans – whether they be federal employees or others. And I think from my standpoint that would not be acceptable.”
Hoyer also argued that cutting federal spending elsewhere would reduce the stimulus to the economy provided by the benefits, which are quickly spent.
The dispute leaves Jo Kelly, 58, of Dallas, Ga., in limbo. She has struggled to find consistent work since she was laid off from AT&T in June 2012 and her federal benefits fluctuated until she got her final check last month for $137. She now has started cannibalizing her retirement savings by withdrawing early from her 401(k).
But Kelly remains optimistic that she will find full-time work soon. Her job search at least is more controllable than what goes on in Congress.
“Worrying about what Washington is doing or the debate whether to cancel or reinstate or continue with the extended unemployment, they’re going to do what they’re going to do,” Kelly said. “And I’m not going to let that influence my life.”
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