What does "fiscal cliff" mean for the jobless?

Joe Raedle/Getty Images

While President Obama has placed his focus of the looming "fiscal cliff" on raising the tax rates for the wealthy, another program that is set to expire that will impact many millions of Americans has received little attention: unemployment benefits.

Up to two million people could lose their jobless benefits on January 1 if Congress doesn't act. It is among a host of programs coupled with tax hikes and spending cuts that make up the so-called "fiscal cliff."

"This is the real cliff," Sen. Jack Reed, D-R.I., said today. He said the economy would suffer as people would be unable to pay their mortgage and buy groceries without their benefits.

President Obama's opening offer to avert the "fiscal cliff," which included $1.6 trillion worth of tax increases, included an extension of unemployment benefits, but it has been overshadowed by the larger discussion over whether to extend the Bush-era tax rate for the wealthy.

Increasing the tax rate on incomes above $250,000 has been central to Mr. Obama's demands, but the extension of unemployment insurance has been a Democratic priority through out the recession and its aftermath as unemployment hovers around eight percent.

Aides to Republican leaders in the House and the Senate did not offer a position on whether they support the program. One Republican leadership aide said it's not possible to talk about individual pieces of the president's proposal at this point as negotiations are stalled. Republicans have, however, insisted that spending be reduced if taxes are to be increased. In their proposal they call for $900 billion in cuts to entitlement programs. While much of it comes from Medicare, unemployment insurance is considered an entitlement program.

Democratic senators called for an extension of the program as part of a "fiscal cliff" deal or in spite of one.

"If there is an agreement, unemployment insurance must be included. If there's not an agreement, we must extend unemployment insurance separately," Sen. Tom Harkin, D-Iowa, said.

The program is expensive, however, and has divided Republicans and Democrats in recent years. A one-year extension would cost $30 billion and the program has cost $520 billion in the past five years.

The evolution of the debate over jobless aid can closely be tracked to the congressional-made creation of the "fiscal cliff."

  • Leigh Ann Caldwell On Twitter»

    Leigh Ann Caldwell is a political reporter for