McAlester News-Capital, McAlester, OK

December 8, 2010

Benefits in question

Thousands of unemployed Oklahomans to lose unemployment insurance

By Trevor Brown
CNHI

OKLAHOMA CITY — Thousands of unemployed Oklahomans are watching Congress to see if their federal unemployment benefits will come to an end.

President Barack Obama and congressional Republicans announced a deal Monday to extend federal unemployment benefits for 13 months as part of a compromise to renew tax cuts that the GOP covets. Member of both parties, however, expressed reservations about the deal Tuesday and the fate of the legislation remains uncertain.



What it means in Oklahoma

Unemployed residents receiving the federal weekly payments will start to lose their benefits once their current round expires unless the bill is passed.

Extended benefits beyond the 26 weeks Oklahoma provides lapsed on Dec. 1. Two million Americans are estimated to be affected if the benefits, which can be used for up to 47 weeks beyond the state payments, are not renewed.

About 120,000 Oklahomans – or 6.5 percent of the workforce – are unemployed, according to October's employment report. John Carpenter, public information officer for the Oklahoma Employment Security Commission, said more than 8,000 Oklahomans are receiving the federal Emergency Unemployment Compensation benefit payments. The state and federal benefits typically pay eligible residents an average of about $300 per week.

Richard Ross, a Tuttle resident formerly from Stillwater, said he's been in the job market for more than a year after losing his job in the technical support field. Ross said unless Congress acts, his benefits will expire in January. Without the $270 he is provided each week, he said he might have to revise his job-seeking plans to settle for a lower paying job.

“It's going to hurt when it runs out,” he said of his benefits while attending a job fair last week at Rose State College. “I'm going to have to be looking then for those $7 or $8 an hour jobs instead. But I'm 50 years old, and I'll be having to look at fast-food jobs that pay minimum wage. I should be looking for something more long-term.”

The employment commission's Carpenter said the loss of benefits would come incrementally in Oklahoma. There are three tiers of federal benefits, and residents would be able to receive payments for the weeks of the tier that already have been approved. Carpenter expects about 2,000 unemployed Oklahomans to lose their benefits each week without a federal extension in place.

The newly unemployed could also feel the impact. Instead of having the possible cushion of more than a year to find a job while receiving benefits, they would just have the six and a half months that the state provides.

Jamila McDonald, an Oklahoma City resident, said she lost her position in customer service and data entry about a month ago. She said finding a new job as soon as possible is even more important since she knows her time to receive benefits might be more limited.

“I'm making it a priority to find something comparable,” she said. “It's hard because I know employers are looking for a specific type of person, but that's why it's important to get yourself out there in this job market.”

Congress extended or modified the federal benefits – called the Emergency Unemployment Compensation program – several times since it was created in June 2008. With nationwide unemployment hovering near 10 percent, lawmakers spent $35 billion to pass the most recent extension in July that continued the program through the end of November.



Congress continues debate

The deal Obama revealed Monday renewed hopes the federal benefits, called Emergency Unemployment Compensation payments, would be saved.

The House of Representatives shot down a proposal on a 258-to-154 vote in November that would have created a 3-month extension at a cost of $12.5 billion. U.S. Rep. Dan Boren, D-Okla., was the sole member of the Oklahoma congressional delegation to vote for the proposal. Gov.-elect and U.S. Rep. Mary Fallin, R-Okla., did not vote.

U.S. Rep. Tom Cole, R-Okla., said Monday he voted against the benefit extensions in November because Obama and congressional leaders were not finished negotiating on both the tax credits and the unemployment benefits.

“I thought it was premature and inappropriate to offer legislation before an agreement on these important priorities could be reached,” he said.

Before the news of the deal between the president and his fellow congressional Republicans was announced, Cole said he was hopeful an agreement would be reached.

The deal extends the unemployed benefits for 13 weeks with Congress paying for it with $56 billion in loans. The compromise also offers $120 billion in payroll tax cuts and provides $383 billion to renew the income tax cuts first passed under George Bush's administration.

Advocates of a new jobless benefits extension said it would provide the unemployed with needed relief given the tough job market. They also point to a nonpartisan Congressional Budget Office report that says every $1 spent on unemployment benefits contributes up to $1.90 in economic growth.

But several Republicans and Democrats criticized the deal Tuesday. Democrats, such as House Majority Leader Steny Hoyer, who campaigned against renewing the tax cuts for wealthy Americans argued that the White House gave up too much in the compromise. Oklahoma's Boren said Tuesday afternoon he is inclined to support the deal, but he said it still “merits further examination."

Meanwhile, some conservative Republicans attacked the plan, along with the jobless benefit extension, because of its high price tag. The tax cuts and 13 months of new benefits is estimated to cost about $600 billion.

“The president hasn’t indicated any other spending offsets or reductions to pay for these benefits, even though he claims to be committed to reducing the deficit,” said U.S. Rep. Michele Bachmann, R-Minn., in a statement Tuesday. “Our economy doesn’t have a moment to waste and it’s vital that we stop these tax increases now, but we cannot overlook the consequences of another unfunded extension of unemployment benefits.”

Sen. James Inhofe, R-Okla., will support the deal Obama announced despite misgivings about the benefits extension, said Jared Young, Inhofe's communication director.

“(Inhofe) has concerns about the unemployment benefits because he doesn't want that to become a precedent instead of people looking for work,” Young said. “But he knows this a compromise agreement.”

Trevor Brown covers the Oklahoma statehouse for CNHI. He can be reached at tbrown@cnhi.com.





---breakout---

Proposed legislative compromise:

    •    $56 billion to extends federal unemployment benefits for 13 months

    •    $383 billion to extend the 2001/2003 income tax cuts for two years

    •    $120 billion payroll tax cut for working families

    •    $40 billion for other tax credits

Source: Whitehouse.gov



---breakout---

Unemployment benefits for Oklahomans:

    •    26 weeks through the state

    •    Up to additional 20 weeks through federal Emergency Unemployment Compensation (EUC) Tier 1*

    •    Up to additional 14 weeks through EUC Tier 2*

    •    Up to additional 13 weeks through EUC Tier 3*

    •    Total possible for Oklahomans: 73 weeks

    •    Eligible unemployed residents will no longer be able to apply for these unless Congress extends the benefits.

Source: Oklahoma Employment Security Commission



----sidebar----

sug hed: Non-profits anticipate greater need

Non-profits are also bracing if Congress does not renew the jobless benefits.

Angie Gaines, marketing manager with the Regional Food Bank of Oklahoma, said the organization expects a 15 percent increase for the demand of its services from the past year. She said unemployed residents who see their benefits expire likely will contribute to an even greater need.

“I would expect an increase,” she said. “One in seven struggle in Oklahoma with hunger already so there definitely is going to be a need.”

The Central Oklahoma Community Action Agency, which provides assistance to low-income families, also is readying for more residents seeking help. Melissa McKay, director of housing for the agency, said the organization can provide some services, such as discounted prescriptions and transitional housing, for families or individuals who are in need after losing their benefits.

However, she said the organization is already limited by its own budget constraints. She said more private support would be needed to make up for more requests from the public.

“There is not enough money to help everyone,” she said. “That leaves a lot of people with no other resources unless they have family or some other support. So losing the benefits, if they are not extended, would cause problems.”

- Trevor Brown/CNHI