Congress Mulls some changes to the unemployment system

This Article from the AP lays out some potential changes that Congress is mulling concerning unemployment---including increases the weekly benefit, making a portion of the benefit tax free and subsidies to keep up with your COBRA or health insurance payments:

WHO GETS WHAT: Stimulus to pad pockets of jobless

By DEB RIECHMANN – 2 hours ago

WASHINGTON (AP) — More jobless workers would get fatter unemployment checks longer in the massive economic recovery package moving forward in Congress.

Helping the nation's jobless has not been a controversial part of the stimulus package. Both the House and Senate versions offer an extra $25 a week in jobless benefits to millions of workers through the end of the year. The current average weekly benefit is roughly $300.

It also would keep unemployment checks coming through the end of 2009 for more than 3 million people whose state benefits will run out after March.

The nation lost nearly 600,000 jobs last month, the worst showing in a third of a century, as a vicious cycle of cutbacks by consumers forced ever more layoffs by beleaguered employers. The unemployment rate catapulted to 7.6 percent, the highest in 16 years, and seemed headed for double digits.

The stimulus would give states $500 million to help process the flood of unemployment applications. There's been such a crush that some states are running out of money, forcing them to tap federal coffers to keep sending out unemployment checks. Computer systems in New York, North Carolina and Ohio have been shut down by technical glitches and heavy volume, and labor officials in other states are reporting higher-than-normal use.

The Senate bill also includes a provision that would suspend federal income tax on the first $2,400 that jobless workers receive in unemployment benefits.

"It goes a long way to fill the gaps in the unemployment program, but this is going to be a long recession, so more may be needed down the road," said Maurice Emsellem, policy co-director of the National Employment Law Project in New York.

The stimulus package also would give $7 billion to states that adopt reforms that make it easier for part-time workers, low-wage earners and women qualify for benefits.

Moreover, lawmakers are considering providing health care to unemployed workers, but it's unclear whether the House and Senate can reconcile their differences on this idea.

"Extending Medicaid to these workers would be a huge boost," said Elise Gould, an economist with the liberal Economic Policy Institute. "If they get sick, or someone in their family gets sick, they're going to go totally broke. Medicaid is what they really need."

Lawmakers also are thinking about changes to COBRA — a law that allows jobless workers to pay to keep health insurance from their old jobs for up to 18 months. It's expensive for people to buy that insurance, so Congress is considering whether to offer subsidies to help the unemployed stay insured.

While the stimulus would cushion the blow for unemployed workers, employment prospects are grim. Tens of thousands of layoffs are being announced every week by well-known companies such as General Motors Corp., Pfizer Inc., Estee Lauder Cos., Caterpillar, Microsoft Corp. and Home Depot Inc. Besides job cuts, companies are imposing hiring freezes.

And economists say the worst is yet to come.