GOP House bill that reduces unemployment compensation approved Tuesday

By | 12.14.11 | 8:31 am

Inside the U.S. Capitol (Pic by ThatMakesThree, via Flickr)

The GOP-sponsored “Middle Class Tax Relief and Job Creation Act,” which extends payroll tax cuts and extends but reduces unemployment benefits through 2012, passed in the U.S. House Tuesday night, but it will not pass in the Senate.

The bill — filed by Rep. Dave Camp, R-Mich., and cosponsored by five other Republicans, including Rep. Ilena Ros-Lehtinen, R-Miami — also cuts “$8 billion from the Harkin Prevention Fund“ and reduces “Medicaid spending by more than $4 billion.”

CBS News reports today that the “measure would keep 160 million workers from seeing their payroll tax jump on Jan. 1 from this year’s 4.2 percent back to its normal level of 6.2 percent,” and would “also renew expiring extra benefits for long-term jobless people.”

The National Employment Law Project said Tuesday the House vote, which includes cuts to unemployment insurance, “will hurt millions of unemployed workers and their families and will further damage the economy.”

The Employment Law Project adds that the House GOP bill would:

  • Cut federal unemployment benefits by more than half in 2012, eliminating 40 weeks of payments.
  • “Allow the last leg of the federal unemployment insurance extension – the 13 to 20 weeks of Extended Benefits (EB) that are available in the hardest-hit states – to expire, mostly over the course of the first half of 2012.”
  • Cut extended benefits in states with unemployment rates higher than the national average, which stands at 8.6 percent.

The Law Project report indicates that under the GOP bill approved Tuesday night, Florida’s unemployed workers would see their unemployment benefits cut by 40 weeks.

Politico reports that the bill, which also “calls for construction of the controversial Keystone KL oil pipeline,” “is dead on arrival in the Democratic Senate and faced a veto threat anyway.”

According to The New York Times, “members of both parties said the payroll tax cut would put money in the pockets of consumers, increasing the demand for goods and services and shoring up a weak economy,” adding that the House bill “would extend jobless benefits for some of the unemployed, while reducing the maximum number of weeks of benefits that a worker could receive.”

The Research Institute on Social and Economic Policy at Florida International University said Tuesday that “if congress does not renew the Extended Benefits (EB) and Emergency Unemployment Compensation (EUC) programs by January 1, 2012, tens of thousands of Floridians currently receiving unemployment benefits funded by the federal government will be cut off.”

The Research Institute, known as RISEP, adds that in Florida, “unemployment has been consistently decreasing since the end of 2010, but labor force participation rates have been decreasing as well. At the end of 2010, the labor force participation rate was 62.7%, but by October 2011, the percentage of working-age population in Florida looking for jobs decreased to 61.8%.”

The RISEP report (.pdf) also argues that whatever Congress decides to do, a law signed by Gov. Rick Scott in June, “will further reduce the number of weeks of federally funded benefits that unemployed workers will be eligible for”:

Last spring the Florida legislature reduced the maximum number of weeks of unemployment from 26 weeks to 23 weeks, depending on how high the unemployment rate is. Starting January 1, the approximately 15,000 people per week who file initial claims for unemployment benefits will be eligible for only 23 weeks of benefits. The state estimates this change will save the Unemployment Compensation Trust Fund $103 million annually, representing a savings to employers but a loss to families and businesses which depend on UC benefits.

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