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The Urgent Need to Extend Unemployment Benefits and Help State Budgets

(photo: aflcio2008)

I mentioned earlier today that the Senate would seek to pass a minimal 15-day extension on unemployment benefits to buy time for a longer extension later. This would cause mass confusion, as jobless Americans would get a letter explaining that benefits ran out followed by another letter saying they were extended just days later. The red tape at state and local unemployment offices would be maddening. What’s more, extending benefits has a stimulative effect.

Given the problems in the states, I would say they do not need any more costly matters right now.

The recession can now claim another troublesome record: state tax collections shrank at the end of 2009 for a fifth consecutive quarter, the longest period of continuing state revenue declines since at least the Great Depression, according to a new report.

Over all, state tax collections fell to $134.5 billion in the last quarter of 2009, a 4.1 percent drop from the $140.2 billion collected during the same period a year earlier, according to the report, which will be released Tuesday by the Nelson A. Rockefeller Institute of Government.

Their unemployment funds in particular have been going bankrupt all year, and absent a federal extension millions of Americans will see benefits run out. In a rare display of bipartisanship, 47 Governors signed a letter to Congress asking for a federal extension of FMAP (Medicaid) funding that was provided in the stimulus package. Frankly, the states are struggling mightily, and millions of jobs along with mass suffering are at stake. We’re talking about a $357 billion dollar shortfall in the states, and the Senate can barely pass $15 billion dollar micro-bills.

Harry Reid says he wants to extend unemployment benefits for all of 2010, in an omnibus package with FMAP help, the COBRA subsidy and tax extenders (and probably an extension of the Patriot Act). But to start with a small extension will make things worse. Working America, a division of the AFL-CIO, is fighting for an immediate extension of unemployment benefits, without a patch.

So it’s time, once again, to call your senators. How many times do they expect us to go through this cycle? They pass an extension that’s not nearly long enough. Almost as soon as it takes effect, we have to start pressuring them again. They drag it out to the bitter end. Jobless workers face more uncertainty, and possibly go through a month without benefits, pulling them even deeper into debt.

Let your senators know these patchwork, piecemeal responses to the needs of tens of millions of struggling families are not enough. We need unemployment insurance to be extended through 2010, so that we can turn our attention to real economic recovery, for the country, for communities, and for families.

People’s lives are on the line.

CommunityThe Bullpen

The Urgent Need To Extend Unemployment Benefits And Help State Budgets

I mentioned earlier today that the Senate would seek to pass a minimal 15-day extension on unemployment benefits to buy time for a longer extension later. This would cause mass confusion, as jobless Americans would get a letter explaining that benefits ran out followed by another letter saying they were extended just days later. The red tape at state and local unemployment offices would be maddening. What’s more, extending benefits has a stimulative effect.

Given the problems in the states, I would say they do not need any more costly matters right now.

The recession can now claim another troublesome record: state tax collections shrank at the end of 2009 for a fifth consecutive quarter, the longest period of continuing state revenue declines since at least the Great Depression, according to a new report.

Over all, state tax collections fell to $134.5 billion in the last quarter of 2009, a 4.1 percent drop from the $140.2 billion collected during the same period a year earlier, according to the report, which will be released Tuesday by the Nelson A. Rockefeller Institute of Government.

Their unemployment funds in particular have been going bankrupt all year, and absent a federal extension millions of Americans will see benefits run out. In a rare display of bipartisanship, 47 Governors signed a letter to Congress asking for a federal extension of FMAP (Medicaid) funding that was provided in the stimulus package. Frankly, the states are struggling mightily, and millions of jobs along with mass suffering are at stake. We’re talking about a $357 billion dollar shortfall in the states, and the Senate can barely pass $15 billion dollar micro-bills.

Harry Reid says he wants to extend unemployment benefits for all of 2010, in an omnibus package with FMAP help, the COBRA subsidy and tax extenders (and probably an extension of the Patriot Act). But to start with a small extension will make things worse. Working America, a division of the AFL-CIO, is fighting for an immediate extension of unemployment benefits, without a patch.

So it’s time, once again, to call your senators. How many times do they expect us to go through this cycle? They pass an extension that’s not nearly long enough. Almost as soon as it takes effect, we have to start pressuring them again. They drag it out to the bitter end. Jobless workers face more uncertainty, and possibly go through a month without benefits, pulling them even deeper into debt.

Let your senators know these patchwork, piecemeal responses to the needs of tens of millions of struggling families are not enough. We need unemployment insurance to be extended through 2010, so that we can turn our attention to real economic recovery, for the country, for communities, and for families.

People’s lives are on the line.

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David Dayen

David Dayen