The programme was not extended as part of the recently passed federal budget, which could have wide-ranging economic impacts.
28 December 2013
Hundreds of thousands more could be affected in the coming months if they remain out of work.
The Obama administration and Democrats in Congress wanted to continue the programme but Republicans baulked at the programme’s $26 billion annual cost.
The federal Emergency Unemployment Compensation programme, an aid package enacted during the recession, pays an average of $300 a week to beneficiaries who have used up the roughly 26 weeks of unemployment insurance offered by most states.
The programme provides up to 47 weeks of supplemental unemployment insurance payments.
Its expiration is expected to have far-reaching ramifications for the economy, cutting job growth by about 300,000 positions next year and pushing hundreds of thousands of households below the poverty line.
Ending the benefits could encourage some workers to take part-time work or lower-paid jobs than they would have otherwise, economists say. Many are expected to give up looking for work altogether.
Some may even apply for disability benefits instead.
“This will likely lead to an artificial decline in the overall unemployment rate,” said Scott Anderson, chief economist at Bank of the West.