Unemployment benefits at risk

NEW YORK (CNNMoney) -- The debt ceiling agreement did little to help the millions of jobless Americans whose federal unemployment benefits are set to run out early next year.

The unemployed had hoped that the debt ceiling deal would include an extension to file for federal unemployment benefits. But in the end, policymakers focused only on cutting federal spending.

As it stands, most people laid off today will not be eligible to collect federal unemployment benefits after their state benefits run out. And those collecting federal benefits could find themselves cut off before receiving the full number of weeks for which they are now eligible.

Here's how the system works: The jobless can collect up to 26 weeks of state benefits before shifting to the extended federal program. Federal benefits consist of up to 53 weeks of emergency compensation, which is divided into four tiers, and up to another 20 weeks of extended benefits. The maximum is 99 weeks.

So those who reach the end of their state benefits after early January will not be able to apply for federal benefits unless the deadline to file is extended. Same goes for those collecting federal benefits now, who will not be able to advance to the next tier once they finish their current one. (Find out how many weeks of benefits are available in your state.)

Early estimates say more than three million jobless Americans could see their benefits disappear in early 2012 unless Congress acts. There are currently 3.8 million people receiving federal benefits, though some will get jobs or run out before year's end.

Since the economy is so weak and the unemployment rate has been climbing, people still need help getting by, advocates say.

"It's still a brutal job market out there," said Chad Stone, chief economist at the Center on Budget and Policy Priorities.

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Advocates say there is still plenty of opportunity to extend the filing deadline for federal benefits, which is currently the first week of January. And President Obama is in their corner.

"We need to make sure that millions of workers who are still pounding the pavement looking for jobs to support their families are not denied needed unemployment benefits," Obama said Tuesday upon signing the debt deal legislation.

But getting another extension past lawmakers will not be easy. Federal emergency benefits began in June 2008 and have been increased or extended eight times since then, including on four occasions last year. When Congress passed a 13-month extension in December, it was thought by some to be the last.

With Congress tasked with slashing up to $2.4 trillion in federal spending, adding billions for unemployment insurance will not be easy.

Rep. Dave Camp, the Republican who chairs the House Ways and Means Committee where the bill would likely originate, has supported extensions in the past, but only if their cost is covered.

Advocates are still hopeful that lawmakers realize that another extension is needed. The unemployment rate rose to 9.2% in June.

"They understand they can't just shut these programs down at the end of the year, especially not with the economy doing so badly," said Judy Conti, federal advocacy coordinator for the National Employment Law Project.

Regardless of what Congress does, some people are seeing their jobless benefits dwindle. That's happening for two very different reasons.

One is that several states are trimming their unemployment benefits, which in turn reduces the length of time the jobless in that state can collect federal checks.

Michigan, Missouri, and South Carolina cut their state benefits to 20 weeks; Arkansas and Illinois to 25, and Florida to between 12 and 23 weeks, depending on the state's unemployment rate, according to the National Employment Law Project. These changes take effect either this year or in early 2012.

At the same time, some states are seeing their unemployment rates drop as their economies improve. The duration of federal benefits is tied to the state's unemployment rate. So as it declines, the jobless there become ineligible for the latter tiers of federal benefits. (See the unemployment rate for your state.)

Pennsylvania residents, for instance, were eligible for up to 99 weeks in November, when the state's jobless rate was at 8.5%. But now that it's fallen to 7.6%, the unemployed can only get a maximum of 86 weeks.

Have you been unemployed for more than two years and have run out of jobless benefits? How are you surviving? Tell us about it and you could be included in an upcoming story on CNNMoney.