While fiscal cliff negotiators focus on big items like the expiration of the Bush tax cuts and the sequester, failure to reach a deal could mean the end of Emergency Unemployment Compensation, currently received by some two million longterm unemployed, including some 40,000 people here in Wisconsin. “They’ve been unemployed for more than six months. They’re actively searching for work or else they wouldn’t be eligible, and in most cases they’ve gone through their savings, and they’re really struggling to get by,” said Jon Peacock with the Budget Project at the Wisconsin Council on Children and Families.
If Congress misses the deadline for averting the so-called fiscal cliff, Peacock said those displaced workers would take an instant hit. “Two-fifths of all the unemployed workers have been searching for work for more than six months,” Peacock said. “They’ve gone through their resources, and they’re really counting on this program continuing. This is a really bleak Christmas for these families, if something isn’t worked out to continue this program really soon.”
A recent report by the nonpartisan Congressional Budget Office found that extending the federal unemployment benefits through next year would create about 300,000 jobs. “These federal unemployment benefits are by far the most effective way of helping the economy during a recession,” said Peacock.