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Unemployment Extension Does Not Create Additional Benefits

There’s been a great deal of confusion surrounding the Democrats’ proposals to extend the filing deadline for unemployment benefits, which came and went yesterday. And it’s easy to see why. A number of media outlets have reported that the Democratic bills include “an extension of UI benefits,” or some variation thereof. (The Associated Press, for example, wrote a widely circulated piece last week indicating that the Senate bill “would continue to provide additional weeks of benefits to jobless people whose unemployment insurance would otherwise expire.”)

Reports like that one have raised the spirits of many long-term unemployed folks, who are hoping that Congress will create additional tiers of benefits. Sorry in advance for being the bearer of bad news, but the proposals floating around Capitol Hill wouldn’t do it.

“It is not a new tier,” the office of Senate Majority Leader Harry Reid (D-Nev.) clarified today, “but rather an extension of the expiration of the [existing] tiers.”

The confusion stems largely from the bewildering framework of the UI system itself. Very generally, states offer 26 weeks of benefits to qualified unemployed workers before four tiers (maximum) of federal benefits — dubbed Emergency Unemployment Compensation (EUC) – kick in.

Tier I (20 weeks) and Tier II (13 weeks) were created by last year’s $787 billion stimulus bill. And last fall, lawmakers stepped in again to (1) add an extra week to Tier 2, making it 14 weeks instead of 13 weeks, (2) create Tier III (13 weeks) for states with unemployment rates higher than 6 percent, and (3) create Tier IV (6 weeks) for states with unemployment rates topping 8.5 percent.

The problem: Beneficiaries must exhaust the benefits they’re receiving before they can file for the next level. Because that filing deadline was yesterday, those exhausting their Tier I, II or III benefits from now forward won’t be eligible for the next level without congressional action.

The House passed a six-month filing extension in December. And Senate lawmakers are currently eying plans to go further, extending the filing deadline at least through December, and maybe two months longer. But neither plan would, for example, add a Tier V.

The distinction is notable in an economy where 6.3 million Americans have been out of work longer than 27 weeks.

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