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Ways and Means Democrats Call for Extension of Federal Unemployment Insurance Through 2012

Press Release

Location: Washington, DC

Ways and Means Committee Democrats today introduced the Emergency Unemployment Compensation Act, legislation to extend federal unemployment insurance programs through 2012. The measure's introduction, by Ways and Means Ranking Member Sander Levin (D-MI) and Human Resources Subcommittee Ranking Member Lloyd Doggett (D-TX), comes with a looming Dec. 31 expiration of Emergency Unemployment Compensation and Extended Benefits, federal programs that currently provide Americans with up to 73 weeks of additional unemployment insurance, averaging $300 a week per person.

The bill would preserve those programs for another year. It would also relieve states that have federal unemployment insurance loans from interest charges next year, prevent higher federal unemployment taxes beginning in January on employers in insolvent states and provide a solvency bonus to states without any outstanding loans. Reps. Levin and Doggett today were joined at a news conference announcing the bill's introduction by Reps. Charlie Rangel (D-NY), Stark, Jim McDermott (D-WA), and Joe Crowley (D-NY).

"Never before has Congress allowed emergency unemployment benefits to expire with such a large percentage of Americans looking for work and we must not let that happen now," said Ranking Member Levin. "We must preserve these vital programs so that millions of Americans laid off through no fault of their own can continue to make ends meet during the worst economic downturn in most of our lifetimes. Failure to act would impose enormous hardship -- by mid-February more than two million Americans will be cut off unemployment insurance. That number jumps to six million by the end of next year."

"With almost five unemployed Americans for every job opening, too many people remain jobless because of a lack of work, not a lack of wanting to work," said Rep. Doggett, Ranking Member of the Human Resources Subcommittee. "While this Republican Congress fails to support jobs legislation and continues to blame unemployment on the unemployed, more than two million Americans will soon lose their unemployment benefits. And more than 6 million will lose extended unemployment insurance protection during 2012. We must create jobs--but for those who do not have one, we must also preserve this lifeline."

"Right now there are many Americans who are unemployed through no fault of their own and are struggling to get by. Holding back benefits for them would be adding insult to injury," said Rep. Rangel. "We should ask ourselves what kind of society we want to live in. It's wrong to turn our backs on people who need support until they can get back on their feet. We have an obligation to help those who are most vulnerable."

"Congressional Republicans have done nothing to create jobs. If they fail to work with us and extend unemployment insurance benefits now, 305,000 Californians will lose their benefits in January. For these workers, their families and millions more around the country, failure to act is not an option," said Rep. Stark.

"For millions of American families, unemployment benefits are their only life line -- it's the only way to put food on the table and keep the lights on. Republicans think people without jobs are lazy. That's just plain wrong," said Rep. McDermott. "With one job opening for every 4 people looking, there just aren't the jobs right now to keep many struggling American families above water. A strong social safety net for Americans who are struggling through no fault of their own is what it means to live in a civilized society. The Republicans' tired philosophy of survival-of-luckiest is mean-spirited and terrible economics."

"While we've waited over 300 days for my colleagues on the other side of the aisle to focus on jobs, the unemployed in this country continue to struggle. It is irresponsible for this Congress to stand by and do nothing," said Rep. Crowley. "Those who have lost their jobs still have children to feed, rent to make and bills to pay. We cannot allow a difficult job market to put the livelihoods of so many families at risk. There is no reason -- none at all -- why this bill should not receive swift action by Congress."

Key Facts About the Emergency Unemployment Compensation Act:

The legislation would prevent over 6 million jobless Americans from losing their unemployment benefits next year by continuing the current Federal unemployment insurance programs through 2012. The Economic Policy Institute has estimated that preventing UI benefits from expiring could prevent the loss of over 500,000 jobs. The bill also would: relieve States with Federal unemployment loans from interest charges next year; prevent higher Federal unemployment taxes in January 2012 on employers in insolvent States; and provide a solvency bonus to States without any outstanding loans.

* Section 101 -- One-Year Extension of Federal Unemployment Programs. The legislation would continue the Emergency Unemployment Compensation (EUC) program and 100% Federal funding for the Extended Benefits (EB) program through 2012.

* Section 102 -- Continued Benefits in States with Prolonged Unemployment. The bill would allow States with high unemployment to provide benefits under the EB program even if their unemployment rate is not higher than in the recent past. States would be permitted by "statute, regulation, or other issuance having the force and effect of law" to suspend the current look-back requirement under the EB program.

* Section 103 -- Extended Benefits for Railroad Workers. The measure would continue the authority to provide extended unemployment benefits to workers covered under the Railroad Unemployment Insurance Act.

* Section 201-- Interest Relief for Insolvent States. The legislation would eliminate the requirement that States pay interest on outstanding Federal unemployment loans for FY 2012 (due 9/30/12) if a State enters into an agreement (under section 203) to maintain the amount, duration and access to regular, State-funded unemployment benefits.

* Section 202 -- Tax Relief for Employers in Insolvent States. The bill would eliminate automatic tax increases under the Federal Unemployment Tax Act (FUTA) that are due in January 2012 (for tax year 2011) from employers in States with outstanding UI loans to the Federal government. This tax relief would be conditioned on a State entering into an agreement under section 203.

* Section 203 -- State Agreements for Assistance. The legislation would require States to enter into agreements to be eligible for assistance under sections 201 and 202. During the period of such an agreement, a State may not alter the method of determining eligibility for, or calculating the amount or duration of, regular unemployment benefits.

* Section 204 -- Solvency Bonus. The bill would provide any State without an outstanding Federal loan an additional 2 percentage points on the interest paid on their unemployment trust fund balances in 2012.

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