White House: Extend jobless benefits

December 5, 2013: 12:33 PM ET
job fair
Job fair: Some 1.3 million unemployed workers will lose federal benefits by Dec. 28, but the White House wants Congress to extend help another year.
WASHINGTON (CNNMoney)

President Obama's newest priority is pushing Congress to extend federal unemployment benefits by another year, and Republicans say they're willing to consider the idea.

Benefits for 1.3 million workers will expire Dec. 28 if Congress fails to extend a recession-era program by the end of this month.

The White House Council of Economic Advisers and Department of Labor issued a joint report touting how jobless benefits buoy the economy, while keeping 2.5 million workers out of poverty each year.

Allowing unemployment benefits to expire "would be harmful to millions of workers and their families," according to the report.

President Obama started using his bully pulpit this week to put more pressure on Congress to extend the program.

Related: Private Sector hiring stronger

"Christmas-time is no time for Congress to tell more than 1 million of these Americans that they have lost this unemployment insurance," Obama said in a speech on Wednesday. "(That's) what will happen if Congress does not act before they leave on their holiday vacation."

The White House points out that if benefits expire, U.S. GDP could fall next year by 0.2 to 0.4 of a percentage point, according to the Congressional Budget Office and a J.P. Morgan Chase (JPM) economist.

The report also suggests the economy isn't strong enough to end benefits.

Republicans had been cool to the idea of extending benefits, saying in memos that the program has already cost $252 billion through July.

But, on Thursday, House Speaker John Boehner suggested he was open to an extension.

"If the President has a plan for extending unemployment, I'll take a look at it," Boehner said.

The program was first signed into law in June 2008 by President George W. Bush, when the unemployment rate was 5.6% and the average duration of jobless insurance was 17.1 weeks.

The unemployment rate climbed to more than 10% at the height of the Great Recession in 2009, and the government extended the federal benefits to jobless Americans whose state unemployment insurance had run out.

However, thanks to a weak recovery, those benefits have been either extended or expanded 11 times, most recently on Jan. 2 . Today, the unemployment rate is at 7.3%, and the average duration of the benefits is 36.1 weeks.

Related: I will lose my jobless benefits by year end

Federal unemployment insurance benefits kick in after a person's state benefits run out, and range between 14 to 47 weeks, depending on the state a person lives.

Only residents in Nevada and Illinois have access to the maximum 47 weeks, according to the National Employment Law Project, an advocacy group. Most states have cut back unemployment benefits, as the labor market has improved.

"As lawmakers prepare to head home to be with their families during the holiday recess, they must not turn their backs on millions of families struggling with long-term unemployment and a weak labor market," said Christine Owens, executive director of the National Employment Law Project in a statement.

Labor Sec. responds to low-wage job growth

The cost to extend the federal benefits by another year is about $26 billion, according to the Congressional Budget Office.

-- CNN's Lisa Desjardins contributed to this report.

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