Unemployment benefits set to lapse

Unemployment benefits for 1.3 million people are poised to end Dec. 28 as Democrats failed in their last-ditch effort to extend the jobless assistance before the House adjourns Friday.

Republicans who control the House refused to keep the aid flowing to the long-term unemployed without agreement on budget cuts elsewhere. Extending the benefits would cost $26 billion over two years, according to the Congressional Budget Office.

Senate Majority Leader Harry Reid (D., Nev.) said Thursday that the lawmakers won't have a chance to act before leaving for the holiday recess. It will be the first issue taken up when Congress reconvenes next month, Reid said, and lawmakers would try to make the benefits retroactive.

"This is something we are focused on like a laser, and we're going to continue working on it," Reid told reporters Thursday. "It's been extremely difficult, procedurally, to move things along."

The failure of Congress to agree could put a dent in the nation's economy. The Congressional Budget Office estimates that extending the program would boost growth by 0.2 percent and add about 200,000 jobs.

"We still haven't seen the type of employment improvement that would warrant allowing this program to expire," said Chad Stone, the chief economist for the Center on Budget and Policy Priorities, a Washington-based group that supports programs to assist the poor. "This means real hardship for real people - but it's also bad for the economy."

While the national unemployment rate fell to 7 percent in November, there were still 4.1 million people, more than one-third of the unemployed, who had been out of work for 27 weeks or more, enough to exhaust state unemployment benefits.

Carlos Pacheco, a 53-year-old lab manager in New Jersey laid off in June, would be among those affected by the benefit lapse. Pacheco received what could be his final benefit check last week if Congress doesn't agree to an extension before the House's scheduled holiday recess after tomorrow.

"I was kind of optimistic when I saw that Congress passed a deal on the budget," Pacheco said in an interview. "But the extension in 2014 of the unemployment insurance was not in this particular deal. It is surprising. They have until Friday to decide on this matter, otherwise they're going to go and leave town."

During the recession, Congress approved 73 additional weeks of unemployment benefits for individuals who were out of work. The extended benefits kicked in when regular aid expired after 26 weeks, meaning those who qualified received benefits for 99 weeks.