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Emergency Jobless Benefits Expire As Policymakers Debate Costs

TALLAHASSEE (CBSMiami/NSF) -- Tens of thousands of Floridians are bracing to lose their long-term unemployment benefits Saturday.

All 88,000 Floridians in the federally-funded Emergency Unemployment Compensation (EUC) program will be cut off Saturday, said state Department of Economic Opportunity spokeswoman Monica Russell.

The emergency benefits, begun in 2008 under President George W. Bush, were created to help unemployed workers who had exhausted their state jobless benefits during the economic recession. And according to the National Employment Law Project, while Saturday's cutoff will affect 1.3 million people, another 850,000 U.S. workers will run out of state unemployment insurance in the first three months of 2014, with no access to federal jobless aid.

Among those are eligible Floridians, whose current 19 weeks of state reemployment assistance benefits will drop to 16 weeks effective Jan. 1, according to Russell.

The elimination of the emergency benefits coupled with the reduction in the maximum benefits for out of work Floridians is a "devastating combination," said U.S. Rep. Ted Deutch, a Boca Raton Democrat.

"That's not just devastating for their own families but for the communities they live in and ultimately it's a drag on our economy," Deutch said. "It's frustrating that we weren't able to do anything before we left."

Congress must vote to continue funding the emergency benefits. Senate Majority Leader Harry Reid has said reviving them is at the top of his to-do list, and a vote could come as early as Jan. 6.

The reauthorization measure may also apply retroactively, Deutch said, adding that economists estimate that 5 million people could be impacted by the loss of the benefits before the end of 2014 if Congress does not act.

But many conservatives say the recession has been over for years and that long-term unemployment benefits discourage people from finding work.

"I don't think it's healthy for our society to create that kind of dependency and keep extending these benefits where people are living on government assistance for years," said state Rep. Dennis Baxley, an Ocala Republican. "That looks like where some folks are headed."

Florida State University economist Randall Holcombe, who is associated with the conservative Tallahassee-based James Madison Institute, blamed the benefits for prolonging the economic downturn.

"I want to be sympathetic with the people who are looking for jobs and having trouble finding them, and that's the reason we have those unemployment benefits," said Holcombe, who served on Gov. Jeb Bush's Council of Economic Advisors. "But when you look at the effect on the overall economy, it's slowed the recovery and it's caused the average duration of unemployment to skyrocket – and we have a lot more long-term unemployed now than we've ever had in the past."

Holcombe points to economic research by the Federal Reserve Bank of St. Louis, showing that the duration of long-term unemployment is 35 weeks, longer than it's been in decades.

"The longer you've been unemployed, the harder it is to find a job," Holcombe said. "So in a sense, we're doing a disservice to people by giving them extended unemployment benefits, because by doing so, they have less incentive to find a job, and the longer they're out of work, the harder it's going to be for them to find a job."

But critics of the move, like Karen Woodall, executive director of the left-leaning Florida Center for Fiscal and Economic Policy, say the end of federal emergency unemployment benefits will weaken a still-fragile recovery.

"Most people who are on unemployment benefits need assistance from social service agencies in addition to the unemployment benefits," Woodall said. "And social service agencies have been very strapped throughout the recession, and many of them have had cutbacks due to the sequestration budget cuts. So it's really a Catch-22 for many, many people in communities across Florida."

And Rich Templin, legislative and political director for the Florida AFL-CIO, said that state statistics showing higher employment rates are meaningless because they don't reflect the millions of people who are not in the unemployment insurance system.

"It doesn't count people that have exhausted their benefits, number one, and it doesn't count people who never qualified for benefits to begin with," he said.

Templin also said the loss of benefits is a loss of economic power, since so many Floridians will be unable to pay for rent, food and other necessities.

But Baxley said the transition will strengthen the economy in the long run.

"We're just at a point of facing the reality that there is a limit to the federal government being able to redistribute and financially provide for every person," Baxley said. "The reality is that unemployment was always designed for a temporary statement of condition to be safety net. …We've instead re-instituted a broad dependency that is unsustainable."

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