"It matters more to regions where unemployment is high and job opportunities are low," said Zandi.
In California, unemployment insurance kept 680,000 people out of poverty each year, including 200,000 children, according to a report released Monday by the Joint Economic Committee in Congress. And in Texas, benefits kept 226,000 people out of poverty, including 56,000 children.
Republicans say that unemployment insurance offers jobless workers the wrong incentives, by paying them not to work.
Economists say that in some cases, unemployed workers who had been holding out for higher wage jobs would be forced to take any job when faced with the prospect of no government check.
It certainly lowered the unemployment rate in North Carolina, points out J.P. Morgan Chase(JPM) economist Michael Feroli. In July, the state government ended extended jobless benefits and since then, the unemployment rate fell 1.5 percentage points, compared to 0.4 nationally.
But economists like Zandi say the reason the end of jobless benefits leads to lower unemployment rates is because thousands of workers stop looking for jobs and fall out of the labor market.
"A lot of older workers will retire and drop out of the unemployment rolls," Zandi said. "The rate falls for the wrong reasons."
But another reason why the federal benefits may not be extended is an improving economy.
Broad-based hiring in November
Gross domestic product -- the broadest measure of economic activity -- grew at a 4.1% annual pace in the third quarter, the fastest it's grown in two years, according to the Bureau of Economic Analysis. And the nation's unemployment rate in November hit a five-year low of 7%.
But the nonpartisan Congressional Budget Office said in December that expiring federal benefits would create a drag on the economy to the tune of 0.2 percentage points and would reduce employment by 200,000 by the end of 2014.