Unemployment Rate Improvement Could Halt Push for Extension in 2015


By Unemployment-Extension.org | February 8, 2015 at 8:37 PM |


According to the U.S. Department of Labor, the number of initial unemployment claims continues to decline, pointing to a firming labor market.

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For most part, the number of applications has remained below 300,000 for several consecutive weeks. Although this could be good news for the economy, it might not be positive news for any hope that the long-term unemployed have held out for an extension of benefits.



At one time, Republican Sen. Dean Heller had been a strong proponent of the need for an extension for long-term unemployment benefits. However, even he seems to have set aside the idea in light of continuing unemployment rates. Most recently, Heller admitted that the votes simply were not there to pass such an extension.

Currently, the administration and Congress appear to have other concerns, including the fact that Social Security Disability benefits could potentially begin to run out by the end of the year. At the same time, the Highway Trust Fund narrowly missed diving off a fiscal cliff.

The only way that said fund was saved was through a combination of methods that were originally intended to provide funding for the Unemployment Extension bill last year. According to the administration, it was necessary to tap into the reserves due to the fact that funding for surface transportation was rapidly dwindling and hundreds of thousands of jobs were at risk during the coming summer months, as a result.



Rhode Island Sen. Jack Reed later stated that the problem with funding the transportation bill in this manner is that the proposed funding for the highway bill, regardless of how important the measure might have been, was the precise same source of financing that was offered for the unemployment extension bill.

That alone could be enough to sound the final death knell for any hope of passing an unemployment extension bill since there now appears to be no way to fund such a bill. According to Roll Call, the highway patch amounted to approximately $10 million.

It is anticipated that incoming Republicans will likely focus more on cut expenses rather than increasing spending, further indicating that a potential EUC this year may not come to fruition. Currently, both Republicans and Democrats seem to agree that there is no need to expand unemployment benefits, even if it were to be on a temporary basis.

Despite the fact that the U.S. unemployment rate is at about 5.6%, 2% of the country’s labor force is still unemployed. Even a bigger issue is the evidence that this segment of the population has remained unemployed for at least six months.



While economists have studied the effects of long-term unemployment, to date there has been no reasonable explanation regarding why long-term unemployment remains a persistent problem, in light of an improving unemployment rate.

Since the expiration of extended unemployment benefits, President Obama has called upon Republicans multiple times to back an extension of such benefits, yet no legislative steps have been taken to get such an extension through the House.

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