White House: Jobless aid lapse may cost 600K jobs

By Reuters
Posted Dec. 2, 2010 at 11:29 a.m.

The White House urged Congress Thursday to extend unemployment aid and warned that failure to act would inflict a heavy toll on millions of Americans that could put the U.S. economic recovery at risk.

“Without an extension, employment would be about 600,000 lower…in December 2011 than if a year-long extension were passed,” according to a new report from the White House Council of Economic Advisers.

U.S. unemployment insurance for those on long-term aid, which Congress had already extended to up to 99 weeks from a traditional 26 weeks of support, expired on Wednesday.

“The impact on the individuals is quite significant and the overall impact of the drop-off in their spending from terminating it would be fairly damaging on our nascent recovery,” council Chairman Austan Goolsbee told reporters.

The report found U.S. economic output would be 0.6 percent lower next year if jobless benefits were not extended,

The jobless rate is stuck near 10 percent following the worst recession since the 1930s, and in October there were 14.8 million Americans counted as unemployed.

Labor analysts say actual payments from extended benefits will end next week for 800,000 jobless Americans, and for 2 million people by year-end. The White House warned that the numbers without aid would then soar if no action was taken.

“Relative to a year-long extension, nearly 7 million unemployed workers in total will lose coverage by November 2011,” the CEA report said.

President Barack Obama, who wants unemployment insurance extended before Congress goes home for the Christmas holidays, has also urged lawmakers to extend tax cuts for middle class American families that would otherwise end on Dec. 31.

His economic team is negotiating with Democratic and Republican congressional leaders on a compromise.

Obama, a Democrat, wants Bush-era tax cuts for wealthier Americans to rise next year. Republicans, who won control of Congress last month, want the tax cuts made permanent for all Americans.

The White House has repeatedly pointed out that Republicans are blocking more aid to America’s jobless while wanting to extend tax cuts for the rich.



  1. Pavel Dec. 2, 2010 at 11:43 a.m.

    I think the moeny to pay for the extension could easily be found. Just cancel some of the pork projects these corrupt politicians have earmarked.

  2. Festinger Dec. 2, 2010 at 12:02 pm

    This article fails to explain how not extending JOBLESS benefits will cause people to lose jobs. That doesn’t make sense. These people don’t have jobs to lose…

  3. Elginbrian Dec. 2, 2010 at 12:15 pm

    Does that mean 800,000 fewer government jobs? We should be all for that.

  4. Gregory Dec. 2, 2010 at 12:18 pm

    Look if the U.S. government thinks that just because it is the holiday season, everyone will find temporary work then they are mistaken.

    The bottom line is that there are more people than jobs and illegal immigration coupled with advancements in computer technology that eliminates jobs is the cause of high unemployment.

    Fianlly, we are going to hear more tragic stories during this holiday season because of so many depressed people who have no job.

  5. WOMBAT Dec. 2, 2010 at 12:41 pm

    This headline is funny. Extended benefits apply to those who have no job already. Sounds like more scare tactics by the Obama gang targeting their weak-minded supporters. The only lost jobs will be government workers screening those without jobs. It’s got to end somewhere.

  6. Matt Dec. 2, 2010 at 12:42 pm

    The Congressional Budget Office, which is non-partison, estimates that for every dollar spent on unemployment benefits the economy sees $1.80 in growth. That is a pretty decent return on investment. Multiple this by billions of dollars, and you can start to see an real impact on the economy.

    Without this economic benefit, the economy would be expected to add 600,000 fewer jobs as a result of the decreased growth.

    Does that explain it for the simpletons?

  7. Fred Dec. 2, 2010 at 12:50 pm

    Yeah 600,000 more people would become eligible for JOBLESS benefits after the government lays them off because they didn’t extend benefits to those that presently are unemployed. But then won’t the government have to HIRE people to administer to those newly unemployed? This logic is circular and therefore illogical. Like harming others to prove your faith to a God of love and peace. Welcome to a world where judgment and power belong to those with the best propaganda machine. Wake up people and think for yourselves. Demand truth and accountability from ALL politicians and corporations. Demand that the business of political lobbying be criminalized. Demand that elections be financed ONLY by individual citizens with proven earned wages, with names and amounts of the donations be available to the public.

  8. clarence Dec. 2, 2010 at 1:26 pm

    Unemployment compensation is not a right. The government can keep paying out money, but the National Debt keeps rising which cannot be payed back. If obama keeps doing this just look at what this committee recommended. Do away with most deductions on your 1040, cutting back on Social Security, cutting back on Medicare, HIGHER taxes just to name a few. Who is going to put food on the table for a retiree if obama would rather give that money to someone unemployed.

  9. Craig Roth Dec. 2, 2010 at 1:31 pm

    Just a thought… instead of useless jobs in government (like aides for elected officials) what about bulking up inspection teams on imported goods, lab workers to test foods coming into the country, and more INS teams to round up illegal aliens? Maybe we could prevent infestations like Emerald Ash Borers or poison protein powder from China? Think of bus drivers to export illegals after the extra teams locate them and you see where all this could go.

  10. Mike Dec. 2, 2010 at 1:55 pm

    Use the money left over from the stimulus bill. When will Obama realize that this money is not his personal piggy bank?

  11. ColdWarVet Dec. 2, 2010 at 2:06 pm

    Ok, times are tough….really tough. But after two years someone whoudl be able to find something. Sure, they won’t be making what they used to, and it probably won’t be their dream job, but when laid off back in the 80’s, I worked two part-time jobs rather than collect unemployment.

  12. Plainfield MBA Dec. 2, 2010 at 2:08 pm

    Seriously… whats not to get. People who spend money with their unemployment benefits create jobs. If people don’t spend money then companies like Wal Mart or Target or other service and retail businesses lay off people.

    And unemployment is a RIGHT. I have paid into unemployment benefit for 16 years and this is the FIRST time I’ve needed it. To get a measly $500 a week is nothing compared to what I have paid in my professional career.

    And if you think that getting $2k a month is keeping me from finding a job where I used to get paid triple that… you are all as stupid as you sound.

    Get educated people!

  13. Melissa Hansen Dec. 2, 2010 at 2:18 pm

    Obviously Plainfield MBA did not go to a Top 20 school. No wonder he is unemployed. He has paid nothing into unemployment, his employers have. And they have depleted those funds and then some. There is no money left. If you can’t afford to live where you are then move somewhere cheaper and set your job sights lower. Obviously you are still spending money on a computer and Internet connections. Time to cut your spending.

  14. Vasago Dec. 2, 2010 at 2:35 pm

    Matt, I really hope your post is a joke. If not…yikes. How about applying some logic: Assuming your ROI is factual (which is beyond silly), why don’t we just ask everyone to stop working and have the government use deficit spending to pay them to stay home? Just imagine the growth and jobs created!!

    As one of the “simpletons”, I have a question. If all this spending has been creating growth and jobs, where are they? We’ve extended benefits to a ludicrous 2 years yet unemployment hasn’t changed.

    Studies have shown that the average unemployed person waits until they have 30 days of unemployment benefits remaining until they look for work. Want to increase employment? Just end the benefits.

  15. Nate Dec. 2, 2010 at 2:52 pm

    I see help wanted signs all over the place. There are lots of jobs to be had out there. Suck it up and take a pay cut.

  16. Mary Dec. 2, 2010 at 2:53 pm

    Melissa…I don’t have an MBA like Plainfield but I do have a bachelor’s degree and a 4 month old infant I’m trying to get child support for. I had a tech job and was laid off while pregnant. Job offers did not come pouring through the door. Move some place cheaper. Alright I moved out of a rental and into a studio long term hotel arrangement that gives free internet. I’d love to get a job instead of getting by on $1060 a month for the two of us. Luckily there are programs for my daughter to have insurance and food so I can still feed her. I guess a cheaper option for me will be moving into a homeless shelter after I sell my computer since emailing resumes isn’t getting me anywhere.

  17. Larry Dec. 2, 2010 at 3:01 pm

    It’s always interesting to hear what OBAMA is going to LIE next.

  18. Larry Dec. 2, 2010 at 3:05 pm

    Plainfield MBA – along the “get educated” lines – you did not pay into unemployment ever.

    You have the RIGHT to be stupid, which you clearly have mastered.

    With your demeanor and intelligence I can’t imagine you not finding a great job right away.

  19. Bill Dec. 2, 2010 at 3:26 pm

    suta and futa on your paychecks represent unemployment insurance as well as other things

  20. Pizen Dec. 2, 2010 at 3:29 pm

    Wow – an 80% ROI for the government? That’s amazing. Let’s encourage industry to fire a few more thousand folks, then use SSI proceeds to fund the unemployment payments. We’ll have SSI solvent in no time.

    Look – it’s not hard to understand that a person with unemployment payments is still going to be paying rent and utilities and buying food, thus contributing to the economy (but not being a net contributor). But the loss of another 600K jobs seems a bit farfetched to me. It’s time to convince PrezBO to stop hating businesses and rich folks (the ones that hire), establish income tax rates that are competetive in the global economy, and then watch the improvements that will surely follow.

  21. Scott G Dec. 2, 2010 at 3:32 pm

    It’s always that have’s that want to keep everything from the have-not’s.

    I hope all of you who think it’s that easy to find a job after being unemployed will one day find yourselves without a job, maybe without a home or any friends. There’s a serious lack of compassion among my fellow man. They think that people born in poor neighborhoods without a chance should just grab the golden ring, it’s right there you’re just not trying, right? They think people leaving on welfare are living the life of riley, really living it up. If you’re that jealous of poor people why don’t you quit your job and see what it’s really like.

    People don’t want to live in America, the real America full of people with various backgrounds, they want to live in gated communities full of people that look like themselves. Because they fear what they don’t understand. They think that by voting with the rich they will be included in their group, but the reality is they want nothing to do with you. You’re closer to the poor people you hate than the rich people you envy.

  22. Brian Dec. 2, 2010 at 3:39 pm

    Who on here believes anything the CBO says? There numbers are all fabrications, all lies. Give me a break. Do some research and you will see that no expert economist or anyone with a decent education ever believes there numbers for anything

  23. Plainfield MBA Dec. 2, 2010 at 3:39 pm

    You guys are seriously dense!

    You pay every paycheck into taxes and social security. Do you guys ever even look into what it is that gets taken out of your paycheck? Or do you guys make it a habit to just give money to the State and the Feds without knowing where it all goes? Your employer is required to pay payroll taxes which in turn came out of your paycheck when you worked for them.

    You guys are seriously needing to stop drinking the Koolaid that the politicians have dished out and get a grip on where the money comes from.

  24. ejhickey Dec. 2, 2010 at 4:53 pm

    This is not an argument about whether unemployment should be extended. Most of congress says yes. this is just an argument about whose pocket to pick in order to come up with the money. Do we borrow more money and add to the national debt and leave our children to pick up the tab or do we cut someone else’s program now in order to give the money to people who are not working?

    However here is a thought: end the ethanol subsidies and use the money for unemployment. Even Al gore says using corn based ethanol is a total waste of resources that does no good for anyone but the farmers who get rich off the subsidy.

  25. Not a MBA Dec. 2, 2010 at 4:57 pm

    Tax Deductions last pay check:

    Fed Withholding – ‘Standard Tax’
    IL Withholding – ‘Standard Tax’
    OASDI – Social Security
    MED – Medicare

    None of those look like FUTA/SUTA…