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Home > News

Rep. McDermott Introduces New UI Extension Legislation

September 10, 2009

In response to direct calls for help by Americans from across the country, Rep. Jim McDermott (D-WA) introduced new streamlined legislation today, HR 3548, to extend unemployment insurance benefits for an additional 13 weeks in states where unemployment has averaged at least 8.5% over the last three months. 

Rep. McDermott, chairman of the Income Security and Family Support Subcommittee that has jurisdiction over the nation’s unemployment insurance system, took the unusual step of introducing a streamlined version of more comprehensive legislation already filed after hearing from hundreds of ordinary Americans who called McDermott to say they have exhausted all their savings, their UI benefits are about to run out, and they face financial disaster unless government continues to provide a helping hand.

“Decent, hard-working Americans from North Carolina to California have been calling my office to tell me they still cannot find work after a year or more after becoming unemployed and they need some additional help to keep their heads above water,” McDermott said.  “I’m unwilling to stand by and do nothing when Americans from all walks of life face an economy where 6 unemployed workers are competing for every one job.”

According to McDermott, there are signs the economy is beginning to move in the right direction, but the exhaustion rate on UI benefits will affect an estimated 400,000 Americans this month alone and grow to over a million by the end of the year.

With a deadline looming on the modest economic lifeline UI provides Americans, Rep. McDermott decided to introduce streamlined legislation today in hopes of faster action by Congress.  The remaining elements of the comprehensive legislation introduced in July will be re-introduced in the near future as a separate bill.

“The comprehensive bill that looks at extending provisions through the end of next year will require more time to debate but too many Americans are quickly running out of time on their benefits and I believe the time to act on extending benefits is now,” McDermott said.

An overview of the major provisions follows.

Unemployment Compensation Extension Act of 2009
Introduced by Representative Jim McDermott

The legislation would extend unemployment benefits by up to 13 weeks for over 300,000 jobless workers who reside in high unemployment States (8.5% unemployment) and who are projected to run out of unemployment compensation by the end of September (and for over one million workers otherwise exhausting benefits before the end of the year).

These benefits will help workers who have lost their jobs through no fault of their own buy necessities for their families (increasing consumer demand), as well as continue their mortgage payments (reducing foreclosures).

Several indicators show the economy is slowly improving, but there are still nearly six unemployed Americans for every available job and long-term unemployment is at an historically high level - one-third of the unemployed, (5 million Americans) have been without work for longer than six months. 

This legislation would NOT add to the deficit because its cost would be completely offset by two provisions.  First, it extends for one year a federal unemployment tax (FUTA surtax) that has been in place for over 30 years and which President Bush proposed extending in his last budget (the tax costs employers $14 per year, per employee).  And second, it requires that current reporting on newly hired employees include the date work started to reduce UI overpayments (as proposed by both Bush and Obama budgets).

Over three-quarters of the workers projected to exhaust their unemployment benefits by September live in high unemployment States that would now qualify for an additional 13 weeks of benefits under the bill.  These high unemployment States are: AL, AZ, CA, DC, FL, GA, IL, IN, KY, MA, MI, MS, MO, NV, NJ, NC, NY, OH, OR, PA, PR, RI, SC, TN, WA, WI & WV.

Additional unemployed workers outside of these high-unemployment States also may qualify for more weeks of benefits this year because: (1) their State is close to meeting the 8.5% total unemployment rate (TUR) threshold in the bill (i.e., Maine 8.4%) and another month of data might push the State’s rate to the required level; (2) their State is close to meeting the 8% TUR required under the permanent-law Extended Benefits (EB) program for 7 weeks of additional benefits (i.e., Connecticut at 7.9%, Colorado at 7.7% and Texas at 7.5%); (3) their State adopts the trigger to draw down 100% federally-funded EB benefits (i.e., Maryland, Mississippi, Louisiana and Hawaii are now eligible for an additional 13 weeks of EB if the States adopt the necessary trigger, a step already taken by 39 States); or (4) their State newly meets the 6% TUR requirement for additional benefits under the Emergency Unemployment Compensation (EUC) program.