Bye Bye 99 Weeks of Unemployment
The economy appears to be getting better and the states are looking forward to cutting unemployment benefits around 75 weeks. This Saturday extended benefits will end for Maine and Michigan, joining 18 other nations. The federal rule for the states is extended benefits are paid by states when unemployment is above 10% for the same quarter in any one of the 3 past years. Many states lacking funds are beginning to cut back regardless of whether Congress keeps the extension to 99 weeks or not. In Washington on Monday, the Republican House caved on this election year, agreeing to extend the payroll tax of 4.2 instead of the normal 6.2%. Taking an average weekly cut of 20 dollars on a 50-thousand dollar a year salary is big enough to be remembered on election day. Maybe last year, maybe next year, but no big fight this time out. Republicans quietly agreed to extend the 100-Billion dollar payroll tax cut without requiring spending cuts to pay for it. That means it will add another 10th of a Trillion to the 15-Trillion dollar deficit. There may be a ruckus from the Tea Party right before their next vacation this Friday evening, but as of now, it looks like a done deal. Presently, there are extended unemployment benefits of 13 to 20 weeks, depending on a state's economic health. If Congress hadn't acted 3.4 Million unhappy and unemployed workers would be losing their benefits on June 2nd. Congressional watcher, Pete Davis told the Christian Science Monitor, there is good reason to have reached this agreement early in this election year. When you shift from 99 weeks to 79 weeks or even possibly to 75 weeks, you get a big lump of people who drop out of the labor force. The result is a lower "headline" unemployment rate--an advantage for an incumbent.