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Mr. KENNEDY. Mr. President, it is clear that our economy is going from bad to worse. Every day the headlines bring more bad news. Fuel prices are going through the roof. Millions of families are at risk of losing their homes. Bankruptcies have risen by 40 percent in the last year alone.
Most alarming, we are seeing a drastic rise in the number of Americans out of work. In December, half a million more Americans were unemployed than the month before. Today nearly 8 million Americans are looking for a job and can't find one. The national unemployment rate has shot up to 5 percent--the biggest increase since the last recession. Experts say this number will rise well above 6 percent in 2009. Vulnerable parts of our population have been hit even harder--last month, 9 percent of African-American workers were unemployed, up sharply from 8.4 percent in November. Latino workers now have an unemployment rate of 6 percent.
What's more, we are seeing a large number of out-of-work Americans who still can't find a new job months later. Nearly one out of five Americans who is looking for work has been out of a job for over 6 months--compared with roughly one out of ten in 2001, before the last recession. With only 4 million job openings and nearly 8 million unemployed Americans, there are two workers for every job. As unemployment rises, there will be even more workers competing for each job. As highlighted in yesterday's front-page article in the Washington Post, this problem is affecting workers across our economy--even those with college educations and years of experience can't find work.
These aren't just statistics. These numbers are coworkers, our relatives, our neighbors. For each and every one of those families, a pink slip can spell economic disaster.
Losing a job isn't just losing a paycheck--it can mean losing the results of years of hard work and sacrifice.
For too many families, losing a job means losing health insurance. Without insurance, an unexpected hospital stay--from a broken leg or a cancer diagnosis--means certain financial disaster. Mr. President, 77 percent of middle class Americans do not have enough assets to pay essential expenses for 3 months. Without a paycheck, the rising price of daily necessities--housing, gasoline, and even groceries--becomes impossible to afford.
Our unemployment insurance program is intended to help workers weather a job loss. Workers pay into the program throughout their careers. If they lose their jobs, they can collect a benefit while they look for work. The amounts are modest--typically less than half of a worker's regular wages--but they help families to pay their rent, keep the house warm, and put food on the table.
In good economic times, such benefits are enough to tide workers and their families over for the few weeks it takes to find a job. But these are not good times. It is taking longer and longer for unemployed Americans to find new work. Over 1.3 million Americans have been looking for a job for 6 months or more. As a result, an increasing number of workers have not found a new job by the time their unemployment benefits run out. Over the past year, over 2.6 million Americans--or 35 percent of all unemployed workers--have exhausted their unemployment benefits. Unless we respond soon, these and other families will be left in the cold.
So we must act, and we must act now, to help these workers before financial disaster strikes. That is why I am introducing legislation today to give workers the help they need and have earned. The Emergency Unemployment Compensation Extension Act will ensure that Americans who keep looking for work but can't find a job after 6 months will be eligible for up to 20 weeks of additional benefits. In very high-unemployment States, workers could also receive up to 13 more weeks of benefits. Because out-of-work families are facing skyrocketing costs of gas, home heating, food, and housing, long-term unemployed workers will temporarily receive $50 extra each week to help pay their bills.
Providing this extension is a matter of fairness. We owe it to all workers who have lost their jobs in this struggling economy to provide help while they look for new jobs. Out-of-work Americans have worked hard all their lives. They have paid into the unemployment insurance system with the promise they would receive its protection when our economy is in crisis. Part of the American Dream is the opportunity to work hard, provide for your family, put your children through school, and save for retirement. When the economy isn't working the way it should and the jobs simply aren't there, we must stick together. We must take care of those who can't find a job.
But there's another major reason to act. Economists agree that extending unemployment benefits is a powerful, cost-effective way to deliver a boost to the economy. The extension of benefits puts money into the hands of those who need assistance the most and are most likely to spend it immediately on basic essentials. This means money is flowing immediately to local businesses, which will in turn provide a further economic boost.
Indeed, according to a report by Mark Zandi of Moody's, each dollar invested in benefits to out-of-work Americans leads to a $1.73 increase in growth--the most of any measure tested. That compares with only pennies on the dollar for cuts in income tax rates or cuts in taxes on investments.
The Congressional Budget Office agrees. Its report last week on short-term economic stimulus found that extending unemployment benefits is among the most cost-effective, potent, temporary steps that Congress can take to jump-start our economy.
This is a tried and true approach to helping working families in economic downturns. In each recession since the late 1950s, Congress has extended unemployment benefits to those who have exhausted their benefits and can't find work. It has often done so by overwhelming, bipartisan votes. Layoffs don't discriminate by party.
Extending unemployment benefits is the right thing to do for the economy and the fair thing to do for workers. I urge my colleagues to join me in helping out-of-work Americans and putting our economy back on track.