Several thousand unemployed Utahns will feel the effects of the “fiscal cliff” at least for a while, even though Congress and the White House reached a last-minute deal that averted a one-two punch of higher taxes and sharp spending cuts that were set to become effective Tuesday.
Beginning Dec. 29, 4,100 people who had exhausted their regular state unemployment benefits saw their federally funded emergency unemployment benefits stop because lawmakers and President Barack Obama had not worked out a settlement that might include funds for the government’s extended benefits program.
As the Senate voted on a deal early Tuesday morning, White House officials said they had succeeded in gaining a one-year extension of long-term unemployment benefits about to expire on an estimated two million jobless.
Bill Starks, who runs Utah’s unemployment insurance benefits program for the state Department of Workforce Services, said the U.S. Labor Department told him and other state insurance directors during a conference call Monday that how the program might work after an agreement was open to question.
“They couldn’t give us any kind of assurances what the program will look like, whether there will be an extension of the existing program, or whether changes will be made,” Starks said.
In any event, if Congress has restored extended benefits, the Utah department will notify claimants who may be eligible for additional benefits, Starks said.
“We will notify [them] if the program is extended or extended with changes” by email or postal mail, he said.
The federal program had been authorized to pay up to an additional 28 weeks of emergency benefits on top of 26 weeks of regular state benefits for a total of up to 54 weeks.
Before Monday night’s vote, the number of workers losing extended benefits was almost certain to rise. An estimated 360 claimants per week will begin to exhaust their state benefits. Without an agreement they would not be eligible to apply for extended federal benefits.
Extended federal benefits are “a big deal” to the claimants, who now may have no other source of income, said Dale Cox, president of the Utah AFL-CIO.
“Contrary to popular belief, I would say that all 4,100 would much rather be working than collecting extended benefits, and without these benefits, I would be willing to bet that some, if not all, will be homeless by the end of the month,” Cox said.
The federal program has paid close to $24 million to long-term unemployed Utah workers during the past three months. That’s down from $133 million in the first quarter of 2010, Starks said.
The unemployment rate in Utah was 5.1 percent in November, with 69,600 people actively looking for work, according to department figures released Dec. 21.