Congress Fails to Reauthorize the
Federal Extension of Unemployment Benefits
Question & Answer
(Revised December 9, 2003)
By National Employment Law Project

1. When was the temporary extension of unemployment benefits created, and what benefits does the program provide to the unemployed?   Today's federal program of extended unemployment benefits (called Temporary Extended Unemployment Compensation, or TEUC) was created in March 2002.  It has been reauthorized twice since then, first in January 2003, and then again in May 2003.  The program provides 13 weeks of federal benefits, in addition to the 26 weeks of state benefits available to most workers.  A limited number of "high unemployment" states qualify for an additional 13 weeks of federal assistance (called TEUC-X). 

2. Now that Congress has failed to reauthorize the program before adjourning for the year, when does the temporary federal program of extended unemployment benefits officially end?  Those workers who run out of state unemployment benefits starting December 21st (December 22nd in New York) will no longer qualify for federal extended benefits. Those workers who started collecting their federal extension may continue receiving their 13 weeks of federal jobless assistance.  Congress reconvenes January 20, 2004, at which time they could enact legislation to restart the program and pay benefits retroactively.

3. How many workers are impacted if the federal program is discontinued?  About 90,000 workers a week will run out of their state unemployment benefits without collecting federal unemployment benefits. That amounts to about 400,000 a month, and more than two million workers over a six-month period.  Since the program was created in March 2002, more than four million workers have also run out of their limited federal benefits.  Thus, they will not qualify for additional assistance unless Congress also expands the program.  (For state-by-state figures, click here).

4. What are the leading indicators that favor reauthorizing and expanding the federal extension program?   The true measure of the demand for unemployment benefits is the level of long-term joblessness, which remains at record levels.  In November, more of the jobless were unemployed long-term (23.7%) than any time in the past twenty years.  The number of long-term jobless also peaked in recent months at over two million workers for the first time since the recession began.  That represents an increase of over 700,000 workers compared to March 2002 when the federal extension program was created.  In addition, a record 77 percent of all workers collecting the federal extension now run out of their unemployment benefits, a rate which has increased steadily since the program was created in March 2002.

5. What about the argument of some Republicans that it's time to end the program because the economy is improving?   When the federal program was created in March 2002, the nation's unemployment rate was 5.7%.  Since then, unemployment has remained at or above the March 2002 rate (5.9% as of November) while often exceeding 6%.   Meanwhile, several states have unemployment rates that far surpass the national average.   By comparison, Congress did not vote to phase out the 1990s extension of unemployment benefits until the unemployment rate dropped by 1.2% from its peak and the economy had produced nearly three million jobs compared to its pre-recession levels.  The current program is scheduled to end when there are 2.4 million fewer jobs than when the recession began.  Finally, the program in place during the last recession did not end until the ranks of the long-term jobless began declining significantly.

6. How does today's program compare with the federal extension in place during the recession of the early 1990s?     During the last recession, workers in all states were entitled to 26 weeks of benefits for an eight-month stretch of the program. That was later reduced to 20 weeks of basic benefits for most of the rest of the program.  Today's benefits have never exceeded the basic 13 weeks, or half the benefits that were available during much of the last recession.

7. What about states with especially high unemployment?  How do their benefits compare?  During the last recession, there were 15 "high unemployment" states that qualified for seven additional weeks of assistance at the peak of the program.  Currently, there are only five "high unemployment" states the currently qualify for extra weeks of TEUC benefits.  In the coming months, only Alaska is expected to remain on the program because of the major limitations of the current federal formula. For example, Oregon, with the nation's highest rate of unemployment, will no longer be considered a high unemployment state eligible for extra weeks of benefits.  That's because today's formula does not count the long-term unemployed who are still looking for work and it requires the state's unemployment rate to have increased significantly over the past two years, even if the actual level of joblessness remains especially high.

8. What were the leading proposals in Congress to reauthorize and expand the federal benefits program?  The Democrats in the House and Senate proposed companion bills (S..1708/H.R.3244)  which would provide the same level of benefits available during the last recession (26 basic weeks for all states, plus 7 weeks more in "high unemployment" states) while reauthorizing the program for six months.  Republican Congresswoman Dunn of Washington and 17 Republican co-sponsors from other high unemployment states introduced legislation (H.R. 3270) to reauthorize the program for six months, without increasing the benefits.   Republican Senator Gordon Smith of Oregon introduced a companion bill in the Senate (S.1839).  Additional bills were introduced toward the end of the session, including Republican and Democrat bills to continue providing extra weeks of benefits to Oregon, Washington and other high unemployment states.

9. What was the nature of the Congressional debate on these Democrat and Republican proposals?  Despite prior public assurances by the House leadership, Congresswoman Dunn's proposal was never allowed to come up for a vote in the House of Representatives.  House Democrats generated 200 of the necessary 218 signatures for a "discharge petition" to require a vote on both the Democrat bill to expand benefits and Congresswoman Dunn's six-month extension.  On the Senate side, Democrats moved for "unanimous consent" on more than a dozen occasions for the Senate to take up various extension proposals.  On each occasion, Republicans objected to the motion, thus defeating the extension measures. 

The day before the Senate adjourned for Thanksgiving, Republican Senator Gordon Smith moved for unanimous consent on his bill to simply reauthorize the program for six months (a proposal that would result in major cuts in benefits for Oregon workers). Senator Smith's motion was objected to by fellow Republican Senator John Ensign of Nevada.  In do so, Senator Ensign compared the plight of today's jobless to the 1996 welfare reform debate, stating:  "Unemployment insurance is the same way.  The more generous the benefit, the easier you make it to stay on unemployment insurance, and the less incentive there is for people to actually go out and do what it takes to find a job."  Republican Senator Voinovich of Ohio also took to the floor of Senate, calling on his colleagues to reauthorize the federal program.

10. How does today's situation compare with what happened last year, when Congress adjourned for the holidays without first reauthorizing the program?  Last year, the Senate leadership produced a bi-partisan extension package before adjourning for the holidays, while the House leadership failed to do so thus allowing the program to expire.  After a public outcry over the holidays, Congress returned in early January to reauthorize the program. In contrast, today's Senate leadership has rejected proposals to reauthorize the program.  Both last year and this year, President Bush and Administration officials refused to take a position on the extension before Congress adjourned.  When questioned as recently as December 4th, Treasury Secretary Snow stated, "We haven't taken a position on that, as yet."