Over 2 million Americans are at risk of losing their unemployment benefits. The fate of the financial system falls on the laps of Congress if they cannot pass an extension by November 30.
Lawmakers have not come to an agreement to extend the benefits, so it looks as if the final payments will be received in December. This time of year is by far one of the worse to lose benefits as the holiday season is upon us. The millions of unemployed are not only worried about the holidays, but more importantly the sustainability of life.
The problem with the extension is a mere game of tennis. Both parties are compassionate about the unemployed, but the funds must come from somewhere. The last extension back in May cost approximately $34 billion dollars and took lawmakers 51 days to pass legislation. This extension added to the deficit, something Republicans balked over.
According to Rep. Sander Levin (D), not passing the extension of emergency benefits not only “devastates
families,” but will also damage “the entire economy by depressing confidence and demand.” The numbers of unemployed support the claims by Levin. The United States unemployment is steady at 15 million and represents 9.6% the total population.
Where does the United States go from here? On one hand the extension of federal benefits could easily cost the economy of close to $80 billion and cause an additional 1 million jobs to be lost over the next year. This is based upon a report from the Joint Economic Committee.
The other side of the financial debacle is the Congressional Budget Office reports that Americans receive on average $6000 and immediately spend the money back into the struggling economy. With close to 15 million unemployed, the boost to the economy is potentially $90 billion. If the initial cost of $34 million is removed, the Federal government saves approximately $56 billion.
Although the costs run high, the lingering cost of unemployment run higher than a dollar sign. The Federal government needs to think of a realistic and functional approach to solving the unemployment crisis.
More Business & Finance articles from Richard Banks:
Federal Budget Solutions: Impacting the Federal Budget
Small Business Survival in a Down Economy
Debt Solutions: Cut the Frills, Pay the Bills, Gamble with Millions