What you need to know about the jobless benefits debate


Dale Washington (C) and other people looking for work stand in line to apply for jobs during a job fair in Miami on May 2, 2013.


Joe Raedle

Around 1.3 million Americans lost a key economic lifeline last month, when federal long-term unemployment benefits expired on Dec. 28, and Congress failed to pass an extension in time.

A new bill backed by President Barack Obama that would resurrect the program cleared a key hurdle in the Senate on Tuesday, offering a glimmer of hope to some.

The bill may pass the Senate later this week, but its future in the House is uncertain at best.

Here's what you need to know about the new legislation, who's affected and how this all happened:

Why did long-term benefits expire?

Former President George W. Bush first signed the program into law in 2008, when unemployment stood at 5.6 percent and the average duration of jobless insurance was just over 17 weeks.

The unemployment rate climbed to 10 percent in 2009 — at the height of the Great Recession — and the government extended federal benefits for the long-term unemployed for the first time. Since then, they have been extended or expanded 11 times, most recently in January 2013.

Most states have cut back on benefits as the economy has improved.

Republicans signaled they would be open to another expansion of federal benefits if the White House came up with a plan, but one never made it into the bipartisan budget deal passed by Congress in December.

Who lost benefits?

Anyone who had been collecting unemployment for more than 26 weeks got cut off on Dec. 28. That was about 1.3 million people initially, although several million more people are expected to hit the limit over the course of the next year.

According to the Obama administration, an estimated 4.9 million people will have been affected by the end of 2014.

Which states have been impacted the most?

California, Nevada, Illinois, Pennsylvania, Connecticut, New York, New Jersey and Massachusetts, where unemployment rates are still particularly high.

What's in the new bill?

The legislation, offered up by a Senate Democrat and Republican, would extend the Emergency Unemployment Compensation program, or federal long-term jobless benefits, for three months at an estimated cost of $6 billion.

Most conservatives don't like it because it doesn't include spending cuts to pay for the cost of the extension.

Senate Minority Leader Mitch McConnell suggested covering the costs with cuts to Obama's health care law, but Democrats called the proposal a "non-starter," saying it would hurt the American people.

Majority Leader Harry Reid signaled he's open to possible amendments if Republicans "come up with something serious."

Clearly, some concessions need to be made or the measure stands little chance in the GOP-controlled House.