WASHINGTON — Instead of brimming with holiday cheer, millions of the long-term unemployed across the United States are anxiously watching to see if the new year brings an end to their jobless benefits.
The US government’s long-term unemployment insurance benefits expire at the stroke of midnight on New Year’s Eve in the absence of an extension from a fiercely divided Congress.
The program is caught in election-year crossfire between President Barack Obama’s Democrats and Republican foes over government spending and deficit cutting.
With the economy still struggling to recover from recession amid high unemployment and a depressed housing sector, both sides overall appear to agree the federal jobless benefits should not be allowed to expire on December 31.
At issue is the scale of the program and how it to pay for it.
The crucial social safety net is a federal emergency program for unemployed workers who have exhausted their state unemployment benefits.
In general, most states cover up to the first 26 weeks of unemployment. Without the federal extension, the long-term jobless will only be able to count on what their state offers.
The federal program providing extended benefits has been renewed several times as the United States grappled with a sharp recession and a tepid recovery.
But this time it is shaping up to be a cliffhanger with Democrats and Republicans replaying the divisiveness that brought the government to the brink of default in August, causing the US to lose its coveted triple-A sovereign debt rating from Standard & Poor’s.
The failure of a bipartisan “super-committee” to reach a deal to rein in the government’s bulging deficits by a November deadline further underscored the gridlock in Washington.
Under a Republican measure proposed Friday in the House of Representatives, the federal benefits are linked with an extension of the payroll tax cuts, sought by Obama, and a decision within 60 days on the controversial Keystone XL oil pipeline project to carry oil from Canada to the Gulf of Mexico.
Republicans and other defenders say the pipeline project will create thousands of jobs, but the Obama administration has delayed a decision until after the November 2012 elections to allow for a new environmental review of the proposal.
John Boehner, the Republican House leader, said Tuesday that passage of the bill would be a “big step toward creating jobs in America.”
Meanwhile, Obama threatened to veto it. The bill “breaks the bipartisan agreement on spending cuts that was reached just a few months ago and would inevitably lead to pressure to cut investments in areas like education and clean energy,” the administration said.
The Republican proposal would extend the federal unemployment benefits for a year but gradually reduce the maximum number of weeks from 99 to 59 weeks.
“A reduction in those benefits would not only spell further financial disaster to the individuals directly but would also further dampen the economic recovery of our nation as a whole,” said Sarah Jane Glynn, a policy analyst at the Center for American Progress, a think tank close to the White House.
The unemployment rate stood at a painful 8.6 percent in November, more than two and a half years after the Great Recession ended.
It dropped from 9.0 percent in October but that was mainly due to 315,000 people dropping out of the labor force, according to Labor Department data.
There were 13.3 million people officially unemployed last month. And of those, 5.7 million, or 43 percent, were long-term unemployed — those without a job for at least 27 weeks — “little changed” from October, the department said.
The exact number of long-term unemployed facing the loss of benefits if the program expires was unavailable from the Labor Department.
According to a recent poll of the long-term unemployed, conducted for NPR and the Kaiser Family Foundation, only 22 percent of them are currently receiving unemployment benefits.
“If Congress fails to act, 2.2 million unemployed Americans will lose critical benefits by February 2012,” the Center for American Progress said Tuesday.
In the grimmest US jobs market in decades, the UAW union urged its members to press Congress to renew the benefits.
“Millions of hardworking Americans — nearly two million in January alone, and over six million in 2012 — will be cut off from the emergency lifeline of federal unemployment insurance, unless Congress acts to renew the program before it expires December 31,” the UAW warned.