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Extend the Unemployment Benefits and Reduced Payroll Tax!

Tell your legislators that they must extend -- without any harmful provisions -- both the unemployment benefits and the reduction in payroll taxes through 2012. The continued high unemployment rate is draining our nation’s resources. These economic boosts are critical.

The extension of unemployment benefits to the long-term unemployed, and the reduction of payroll tax were signed into law on December 23, 2011. However, this law only lasts until February 29, 2012. Assistance to eligible long-term unemployed workers would end in the week ending on or before March 6, 2012. The payroll tax reduction would end at the same time, increasing the tax paid by all employees by two percent. This would make it increasingly difficult for low- and middle-income families to meet their responsibilities.

In December, competing House and Senate bills were considered. With pressure to get home for the holidays, Congress agreed to the Senate bill – the two-month extension. A conference committee was formed and they are trying to agree on legislation to extend both provisions through 2012 by coming to some compromise between the House and the Senate versions. Historically, unemployment benefits have been considered emergency spending, and did not require offset savings. However, in the current congressional climate, offsetting spending is required.

The House bill contains provisions that are cruel and would be devastating to most people in need of unemployment benefits.

  • Benefits would be denied to anyone who lacked a high school diploma or a G.E.D., regardless of age or experience, unless currently enrolled in a program to obtain either. According to census data, nearly 1.5 million recipients of UI in 2010 lacked a high school education. More than 35 percent of these are workers over the age of 50. The education programs necessary to become eligible under the House plan have been cut severely, and the requests for admittance have doubled to over 160,000 in the last 2 years. It is unlikely that those needing the education would be able to find it. Fewer than 20% of workers without a high school education are under the age of 30.
  • States would have the authority to require drug tests on potential recipients of benefits.
  • Up to 10 states would be granted a waiver to use federal money from unemployment insurance for other purposes, which would undermine the purpose for which Unemployment Insurance was established. State or local funds now used for job training could also be diverted – even to be used for tax cuts.
  • The total number of weeks for which a person could receive benefits would be cut significantly under the House plan. The maximum depends on each state, but all would be reduced by 10 – 20 weeks.
  • The “offsets” for the House plan include:
  •  A 10% reduction of federal workers, across 10 years. This would likely include persons who administer the social safety net programs, making it even more difficult for those in need to receive services. This would also decrease the organization and efficiency of these programs.
  • Denial of the refundable Child Tax Credit (CTC) to immigrants working under an ITIN number, rather than Social Security. These workers are paying taxes. Yet, their children would be denied the help to keep them out of poverty and ensure that their basic needs are met.

There are other “offsets” or tax proposals being considered for this legislation, which will continue to be considered for any other spending bills. See the chart of NETWORK’s assessment of these.


The UI benefits and the payroll tax reduction help not only the individual worker (and her/his family) but also our nation’s economy. Those without income are far less likely than employed workers to spend money, even on necessities. Allowing these benefits to expire, once again, places even more of our neighbors at risk of food insecurity, and of joining the ranks of the homeless. The stress of being out of work has devastating effects on psychological health and is shown to lead to abuse in the home and other violence.

Almost 50 million people in this wealthy nation live in food-insecure households. Of these, over 16 million are our children! Hunger has devastating effects on children’s health, development and the ability to learn. Presently, three million Americans go without shelter every night; approximately one quarter are children. We are damaging the future of our nation, draining hope as well as energy, health and intelligence from future generations. We must not add to that number.

Our faith traditions call us to care for those in our societies who are most vulnerable, those least able to provide for themselves and their families. The lack of jobs in both the private and the public sector are making it impossible for many who seek work, to find meaningful employment.

Legislators must act now to extend the unemployment benefits and reduction in payroll taxes through 2012 in the form of a clean bill, without harmful provisions.