President Bush on November 21 signed H.R. 6867, the Unemployment Compensation Extension Act of 2008. The new law extends emergency unemployment benefits to twenty weeks and establishes a second tier of 13 weeks of compensation for individuals in states with high unemployment rates, noted a White House statement. High unemployment states are defined as having a seasonally-adjusted, three-month average total unemployment rate of 6 percent, providing a total of up to 33 weeks of extended benefits.
White House Press Secretary Dana Perino on November 21 said "the whole world has changed" since the president signed an unemployment extension bill in June 2008. In June, the unemployment rate was 5.5 percent. The national unemployment rate is currently 6.5 percent. Perino, at a press briefing, explained that Bush concluded it was appropriate to sign an additional unemployment extension bill because of the tight job market created by the current financial and credit crisis.
House Ways and Means Committee leaders praised the action taken to provide additional jobless benefits. Committee Chairman Charles B. Rangel (D-NY), in a written statement, said that extending the benefits will help unemployed workers to "pay their mortgages, feed their families, and heat their homes." House Income Security and Family Support Subcommittee Chairman Jim McDermott (D-WA) said the new law "represents a humane, responsible and pragmatic course of action to assist decent hard-working Americans who cannot find a job in a declining domestic economy that continues to shed jobs."
The House legislative leaders noted that the extended benefits, which average about $300 per week, are fully funded by monies saved in the federal unemployment trust funds. In early October, the House passed the bill, H.R. 6867, on an overwhelming bi-partisan vote of 368-28. The benefits provided by the legislation would be in addition to the 13 weeks of federally-funded extended unemployment benefits provided by Congress in June.
The legislation would provide $5.7 billion in additional UI benefits and economists calculate that every UI dollar yields approximately $1.64 in economic impact as the money ripples through the economy and helps to sustain other jobs and restore consumer confidence, according to a Ways and Means press release. According to Ways and Means, economic studies show that money from unemployment insurance is "almost immediately re-injected directly into the economy to pay for food, housing and other family expenses."
Nearly 900,000 workers are estimated to have run out of their current extended benefits by the end of October. Without this legislation, this number would grow to 1.2 million by the end of calendar year 2008, according to the Ways and Means release.
Senate Majority Leader Harry Reid, D-Nev., in a written statement on November 20, noted that the UI extension came "on the day we learned that more Americans are filing for unemployment than at any time in the last 16 years."
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