End of federal unemployment extensions affects about 713 Rock County residents

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Jim Leute
Thursday, January 16, 2014

JANESVILLE—Congress' failure to extend federal unemployment benefits has officially ended an income stream that's intermittently helped Emil Hefti for nearly five years.

The Beloit man and 292 others lost their jobs in 2009 when Alcoa Wheel Products closed its plant in Beloit.

Now, Hefti is one of 713 Rock County residents the state estimates were affected by the discontinuation of federal Emergency Unemployment Compensation program.

Congress continues to wrangle over a possible resurrection of a program that expired Dec. 28 and cut off support for more than 1.3 million unemployed workers who have exhausted state-paid benefits that generally run for 26 weeks.

Since being laid off at Alcoa, Hefti has gone back to school and held a variety of jobs that typically ended with more layoffs.

“A lot of people think all we do is sit around on our butts,” Hefti said. “But if a man don't work, the kids don't eat.”

Prior to the end of the federal extension program, those unemployed in Wisconsin were eligible for a maximum of 54 weeks of unemployment benefits--26 weeks of state benefits followed by two 14-week federal extensions. Both federal extensions expired Dec. 28.

The first 14-week federal extension was available in all states. The second was only available in states such as Wisconsin with three-month seasonally adjusted unemployment rates between 6 percent and 7 percent. Wisconsin's unemployment rate has been averaging about 6.5 percent.

Other extensions were available in states with higher unemployment.

Hefti said his weekly unemployment checks were about 35 percent of what he was earning at Alcoa.

“I lost about 60 percent of my wages,” he said. “But the bills—insurance, taxes, everything—keep going up and need to be paid. Now I've even got to pay forward for phone service before I even use it.”

Hefti continues to look for a job. Last week, he interviewed with a manufacturer new to Beloit and worked with a Rock County Job Center representative to learn about a recertification of his Commercial Driver's License.

“When I went back to school, I got good grades and lots of commendations,” he said. “It just seems that the need for manpower isn't there.”

The macroeconomic impact of the end of the federal benefits program is difficult to determine on a local level. In Wisconsin, weekly unemployment benefits range from $54 to $370 and are dependent on a calculation involving the unemployed individual's earnings.

Assuming 713 people whose benefits were cut in December received a weekly check of $300, the local impact would be nearly $214,000 in lost income.

That translates into about $850,000 a month or $10.2 million a year in lost benefits.

In Walworth County, the state estimates 374 people were affected by the discontinuation of the federal extension.

Meanwhile, compromise talks on long-term jobless benefits ran aground in the Senate on Tuesday, leaving the fate of the measure in doubt while Republicans and Democrats vied for political advantage in the wreckage.

After more than a week of negotiations, the Senate blocked a pair of Democratic-drafted proposals from advancing, after first denying Republicans a chance to change the legislation—all on near party-line votes. 

Tuesday's events are likely to be the Senate's last word on the unemployment measure until late this month or next month at the earliest. 

An initial Democratic proposal would have renewed the expired federal extensions for three months, but without offsetting budget cuts. That meant pushing federal budget deficits higher by about roughly $6.4 billion over a decade. 

Under pressure, Democrats eventually rewrote their proposal to reduce the maximum number of weeks of benefits it would provide. They also proposed offsetting the cost with provisions set to begin more than a decade into the future. Instead of three months, the new program would have run until November. 

On Monday, more than a half-dozen Republicans countered with a plan for a three-month renewal of jobless benefits, coupled with a repeal of recently voted curbs on cost of living increases that go to military retirees under the age of 62. The total cost was put at about $12 billion, and would have been offset over a decade.

—Material from the Associated Press was used in this story. 

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