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GOP threatens huge cuts to unemployment insurance

The stalemate in Congress over extending a payroll tax cut also affects unemployment insurance. Republicans want to limit federal benefits for the long-term unemployed to 59 weeks, down from 99 weeks now. One Republican says he's willing to go to 26 weeks.  

By Staff writer / February 9, 2012

Rep. Tom Reed (R) of New York speaks during a news conference on Capitol Hill in Washington late last year. He says he is willing to take a hard line on unemployment insurance benefits.

Susan Walsh/AP/File



A Democratic bid for a breakthrough on payroll-tax negotiations fell flat on Thursday, as Congress closes in on a Feb. 29 deadline with few signs of progress.

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If Congress fails to act: the Social Security payroll tax that comes out of every paycheck will revert back to 6.2 percent from the current 4.2 percent tax “holiday,” doctors treating Medicare patients will see their reimbursements drop 27 percent as the “doc fix” expires, and millions of long-term unemployed workers will lose benefits.

So far, public meetings of have yielded little agreement, so a 20-member House-Senate conference committee opted this week to go behind closed doors to accelerate progress toward a deal. But, so far, the toughest issue – how to offset the $160 billion cost of extending all three elements – has yet to be engaged.

On Thursday, Republicans on the panel rejected a new Democratic proposal to cut federal unemployment insurance from its current 99 weeks to 93 weeks. Republicans propose cutting back insurance to a maximum of 59 weeks.

Meanwhile, Democrats dismissed two GOP proposals aimed at making the plan more palatable for tea party conservatives wary of government spending. One was to require people receiving unemployment benefits to work toward a high school diploma by enrolling in a GED program. The other was to give states the option to require drug testing for recipients.

Democrats are not willing to allow states the flexibility they need to give people tools to be reemployed,” says freshman Rep. Tom Reed (R) of New York. A strong advocate for these provisions, Congressman Reed says he’s now prepared to send unemployment benefits back to a 26-week level.

“The president says that the economy is good, so it must be time to go back to 26 weeks,” he added. 

Is that the view he sees of the economy back home in upstate New York? “No,” he adds. “I question the president’s numbers, but it’s time to take him at his word.”

In a public hearing on Tuesday, Sen. Jack Reed (D) of Rhode Island challenged the GED proposal on the grounds that it imposes an added burden on older workers and may not, in the end, help workers get back into the job market.

Thirty-five percent of those unemployed workers without a high school diploma are over 50 years of age, he said. Many have more skills – including technical certificates and company training awards – than younger unemployed workers with educational credentials.


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