Unemployment benefits expected to be reinstated with $34 billion bill

Unemployment benefits expected to be reinstated with $34 billion bill

After a six-week wait, unemployment benefits are expected to be retroactively reinstated next week for more than 2.5 million Americans who have been out of work for at least six months. 

The Senate is expected to vote Tuesday afternoon on a stand-alone $34 billion bill that will provide those extended benefits of up to 99 weeks through November. 

About 43 percent of unemployed workers had been out of work for six months or more and 29 percent of unemployed workers had been jobless for more than a year, a Joint Economic Report released Friday said. 

Funding for the benefits was cut off June 2 when Senate Republicans launched a successful filibuster, arguing that not paying for the bill would add to the growing debt. 

Democrats will get the vote they need -- the bill has been short the 60th vote since the death of Sen. Robert Byrd (D-W.Va.) -- when Carte Goodwin is sworn in Tuesday as Byrd's interim replacement.

The Joint Economic Committee report said extending unemployment benefits, "in addition to providing a lifeline to struggling jobless workers, would have ripple effects across the economy, helping to boost growth." 

Unemployed workers spend their benefits quickly, "generating a multiplier for the economy as a whole, where a dollar of unemployment benefits sets off a cascade of spending by others," the report found. 

The report also found that the benefits keep unemployed workers attached to the labor force, preventing some workers from shifting to other more costly government programs, such as Social Security Disability Insurance.

Increasing access to credit for small businesses could also help spur job growth in a segment of the economy that employs three out of every four workers.

The report makes a connection between the collapse of the housing market and unemployment levels. 

Nevada, Florida and California saw the their unemployment rates climb in conjunction with the housing market declines, thus leading to mortgage delinquency rates. 

"A weak housing market may contribute to a mismatch between workers and jobs as an unemployed worker may be unable to move to faster-growing regions because it is impossible to sell his home," the report found.