Federal unemployment benefits are set to expire on Saturday for about 1.3 million long-term jobless Americans, cutting off a key economic lifeline after lawmakers failed to agree on an extension in the recent budget agreement.
The federal Emergency Unemployment Compensation program, an aid package enacted during the recession, pays an average of $300 a week to beneficiaries who have used up the roughly 26 weeks of unemployment insurance offered by most states. The Congressional Budget Office estimates the program would pay out $25 billion in 2014 if extended through next year.
President Barack Obama has signaled support for a proposal in the Democratic-controlled Senate to extend benefits for three months while a longer-term solution is brokered. Whether such a proposal stands a chance in the GOP-controlled House remains unclear.
The economic forecasting firm IHS Global Insights predicts the expiration of the benefits would take 0.2 percent off projected GDP growth of 2 percent to 2.5 percent. The program’s expiration has “a measurable impact in the first quarter,” IHS’ chief economist told the Wall Street Journal, “but not really a material impact unless you’re part of the 1.3 million.”