As lawmakers return to Washington on Tuesday, giving the jobless in states hit hardest by the recession another 13 weeks of funding will be one of the first issues they'll address. If approved, unemployed workers could qualify for nearly two years of assistance.
That would be good news for Tricia Butts of Taylor, who lost her job as a billings clerk in November 2007. Despite being persistent, she will spend this Labor Day without a job.
"I went on one interview to a trucking company for billing, and they said 500 people had applied," said Butts, who has run out of jobless benefits.
"I've gone to bars. I can't even get a waitress job. I apply for everything," said Butts, 36, who moved into her dad's home with her two children after she couldn't keep up with rent for an apartment. The job market has spurred her to go back to school to pursue a career as a medical assistant.
But critics of the plan to extend benefits say unemployed workers have gotten enough help, and another extension would merely delay pushing them to make tough choices so that they can get back into the work force.
Pete Sepp, spokesman for the National Taxpayers Union, a watchdog group, says the proposal would do more harm than good.
"When the federal government keeps spending money it doesn't have, businesses won't be able to borrow the money they need to actually create jobs," he said.
Drew Hammill, spokesman for House Speaker Nancy Pelosi, said the economy will determine the future of the benefits expansion bill sponsored by Rep. Sander Levin, D-Royal Oak.
"Clearly, unemployment remains the lagging number in an otherwise improving economy," Hammill said.
Senate Majority Leader Harry Reid said: "Soon after Congress returns to Washington we will need to address this matter ... There is an economic case to be made for extending unemployment benefits."
Meanwhile, top economic advisers to President Barack Obama signaled on recent Sunday news programs that another extension may be needed.
Since June 2008, Congress has extended jobless benefits three times.
Unemployed workers initially qualify for up to 26 weeks. But with the extensions, Michiganians are eligible for 79 weeks of benefits -- or 1 1/2 years. The proposed extension would boost the number of weeks to 92 -- a year and nine months.
States that would qualify for the extensions would have to have unemployment rates hitting 8.5 percent or higher under a Senate bill co-sponsored by Carl Levin, D-Detroit, and Debbie Stabenow, D-Lansing, or 9 percent or higher under the House bill. Michigan's unemployment rate is 15 percent, the highest in the nation.
Both bills also would keep the earlier extensions available through the end of 2010 and continue an extra $25 benefit per week provided by the American Recovery and Reinvestment Act.
Mich. trust fund depleted Because of high unemployment, Michigan's unemployment insurance trust fund -- which is paid for by a tax on employers laying off workers -- is depleted, forcing the state to borrow $2 billion from the federal government.
>From the state's perspective, the fact that the federal government
would largely pay for the extended benefits through 2010 means the
already strapped unemployment insurance trust fund would not have to
borrow as much from the federal government.
Gov. Jennifer Granholm is urging Congress to act quickly.
"Many of our unemployed are already in their final weeks of unemployment benefits and face the gut-wrenching prospect of not having money to the pay the mortgage, buy food, or put gas in their cars," Granholm said.
About 450,000 unemployed workers in the state are receiving benefits.
Michigan provides a maximum of $362 per week in unemployment benefits to previously full-time workers, plus the additional $25 per week through the Recovery Act, for a total of $387 per week. At the end of August, about 18,000 jobless workers in Michigan received their last checks.
By year's end, about 1.5 million unemployed Americans will lose benefits without an extension, according to the National Employment Law Project.
A tale of two recessions This recession -- which began in December 2007 -- has left people unemployed for longer periods than during the 1981-82 recession, which lasted 16 months, said Charles Ballard, an economist at Michigan State University.
The national unemployment rate in that recession was higher than it is today, 10.8 percent versus 9.4 percent. Michigan also fared worse, with unemployment reaching 16.9 percent then compared with 15 percent now.
But nearly 4 million more jobs have been lost in this recession, which economists haven't declared is over.
Also, workers have found it harder to find new jobs: In 1981-82, the average person was unemployed for 21 weeks, compared to 25 weeks now.
The longer period on unemployment may work against workers, said James Sherk, a labor expert at the Heritage Foundation, a conservative policy research group. Studies show jobless workers search more intensively when their benefits are running out, meaning an extension delays them -- and the economy -- from gearing back up, he said.
A study co-written by Princeton University economist Alan B. Krueger and Stockholm University economist Andreas Mueller found that on average unemployed workers spent less than 20 minutes a day looking for work until they got close to exhausting their benefits at 26 weeks, when they spent more than 70 minutes a day.
"At some point, workers simply have to move and take the jobs where the jobs are," Sherk said. "You can't subsidize indefinite unemployment."
But Meri Pabucciyan of Oak Park, who lost her job in October, says she would much prefer a paycheck.
She has raided her 401(k) account to cover expenses that her $774 unemployment check every two weeks can't meet.
"I don't want to be on unemployment. I want to work. It's my nature," said Pabucciyan, who is in her 50s and worked in purchasing at a supplier of traffic signs.
"I've been sending resumes, making phone calls, everything."
dprice at detnews.com (202) 662-8736