STOCK MARKET WATCH -- Monday, 26 November 2012

[Demeter]

15. Deadline Looms for Long-Term Unemployed

Benefits for More Than 2 Million Could Expire at Year-End

http://online.wsj.com/article/SB10001424127887324712504578133093359840804.html?mod=dist_smartbrief

More than 40% of the nearly five million Americans who receive unemployment insurance are set to lose those benefits if federal programs expire as scheduled at year-end. Some economists worry that cutting off those benefits could harm the economy by leaving millions of Americans with less money to spend on everything from food to fuel. Others argue that overly generous benefits are helping to prolong joblessness.

About 2.1 million Americans receive payments through federally backed emergency unemployment programs, which Congress adopted starting in 2008 as a temporary supplement to state-level programs funded primarily with taxes on employers, which generally offer six months of benefits. That number has tumbled from more than 3.5 million at the start of the year and a peak of more than six million in early 2010, reflecting not just the gradual improvement of the job market but also new limits that have pushed hundreds of thousands of workers off the rolls before they could find jobs. Already this year, hundreds of thousands of people have exhausted their jobless benefits. Now, virtually everyone left in the federal programs would lose their benefits if the programs expire as scheduled at year-end.

Congress has repeatedly extended unemployment benefits amid high joblessness, and it could do so again. But the programs have gotten caught up in the fight over the "fiscal cliff," a package of tax increases and spending cuts due to take effect early next year. Some Democrats are pushing to extend benefits again, but the programs must contend not only with Republican opposition but also competing priorities such as business and individual tax breaks. For more than a year, unemployment benefits have been contracting. At the peak of the jobs crisis, workers in many states were eligible for up to 99 weeks of unemployment benefits. Today, New York offers the longest-lasting benefits, at 83 weeks, and other states—including those with double-digit unemployment rates such as Nevada and California—offer 73 weeks at most. In a handful of states, benefits now expire after less than a year. As a result, benefits are expiring far faster than unemployed workers are finding jobs. As of October, about half of job seekers were receiving unemployment benefits, down from about 70% in early 2010.

With national unemployment at 7.9%, more than two points higher than when Congress enacted the temporary benefits in 2008, few economists support eliminating the federal programs entirely. But James Sherk, a senior policy analyst for the Heritage Foundation, a conservative think tank in Washington, said given current unemployment, benefits should last about 60 weeks. Mr. Sherk said overly generous benefits can prolong unemployment by giving people an incentive to keep looking for jobs they are unlikely to find.

"If you've been unemployed for a year, that job you're looking for probably doesn't exist," Mr. Sherk said.

THANK YOU VERY MUCH, JAMES SHERK AND HERITAGE FOUNDATION

WAS EVER A MAN BETTER, MORE APTLY NAMED? AND WHAT KIND OF HERITAGE IS THAT?