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Written by admin on November 16th, 2009

Unemployment Insurance Benefits Extended

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The United States House of Representatives voted to extend unemployment benefits to the nation’s jobless. Initial unemployment claims continue to rise even as those first losing their jobs now face losing their unemployment benefits. The rising unemployment is yet another sign there will be what is called a jobless recovery.

The House legislation extends the unemployment by an additional 14 weeks. This is welcome news to family members having difficulty finding jobs in the weak economy. The bill also extended the tax credit for first time homebuyers and added a new credit for people who sell their home and buy another.

President Barack Obama signed the bill on 6-November-2009. This bill restores unemployment benefits to over 600,000 who lost their benefits in the last two months and helps others about to lose benefits. There is some controversy over the extension of benefits only because some believe extending benefits for so many weeks does not motivate people to get back into the economy and find new employment sources.

It’s a catch-22 situation because there is a natural desire to help those who are victims of the recession. On the other hand, there is concern the government is spending money it simply does not have and that will slow down the pace of the recovery. But most Americans sincerely desire to help those who are trapped by the poor economic conditions, and that’s why the House extended benefits.

The House vote followed approval of the bill by the Senate. All unemployed Americans will get a 14-week extension of their unemployment benefits, but there is an additional benefit in the bill. People living in states that have unemployment rates above 8.5 percent will have their unemployment benefits extended by 20 weeks. At the passage of the bill there were 27 states this provision applies to.

The new bill also extends the housing credit for new home purchases that proved to be so popular. But this time around there is also a lesser credit given to people who sell their houses and buy another one. The rules are as follows.

• $8,000 for first time homebuyers

• House must cost less than $800,000

• $6,500 for existing homeowners

• Raises the earnings limit of eligible homebuyers to $125,000 for single payers and $225,000 for joint filers

• Credit phases for singles earning between $125,000 and $145,000 and for joint filers earning between $145,000 and $245,000

The first phase of the first time home buying program was extremely popular. The credit has been extended to help consumers, the mortgage market, and economic recovery.

House Speaker Nancy Pelosi was quoted as saying this about the unemployment benefits extensions, “The legislation offers a lifeline to out-of-work Americans, to the men and women hardest hit by the recession. It means more Americans will have access to the support and assistance that they need to get back on their feet, re-enter the workforce and contribute to our economy and succeed.”

Job creation is a focus of states and the federal stimulus spending. Until unemployed Americans are able to get back to work the economic recovery will be stymied.

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3. Dodge a Cash Crunch Amidst Unemployment Woes
4. Joblessness Taking Toll On Recovery Efforts
5. New Data Suggests Recession Is Loosening Its Grip On U.S. Economy