Friday, February 13, 2009

Obama's Stimulus Plan's impact to the unemployed

According to the USA Today the Obama stimulus plan contains several provisions that will help the unemployed including: (1) Raising the weekly unemployment insurance benefit (2) Maintaining the Tier 2 extended unemployment insurance program (3) No taxation on some of the unemployment income and (4) subsidizing COBRA or other Health Insurance plans for the unemployed.

Here's a bit of the story:

THE SAFETY NET: Jobless get a little extra help

Many of those who are unemployed will get a boost from the stimulus bill, including a $25 increase in weekly benefit checks through 2009 that should help not only those who are out of work but the broad economy as that money gets spent.

Currently, the nationwide average weekly check to those receiving unemployment benefits is $295.05, ranging from $179.08 in Mississippi to $408.28 in Hawaii, according to the National Employment Law Project.

Increasing payments is a good way to stimulate the economy, because, "You can get money into the hands of people right away," says Michael Hicks, director of the Center for Business and Economic Research at Ball State University. And people who are unemployed are likely to spend it.

More than 4.8 million people were collecting unemployment benefits at the end of January, up 78% from a year earlier and the highest since records began in 1967, the Labor Department said Thursday.

The bill includes other measures to help those who have lost their jobs. They:

•Lengthen the period in which people can be eligible for extended unemployment benefits. The program, which provides up to 33 weeks of extra jobless benefits after workers exhaust the regular 26 weeks received in most states, was passed last year and was set to expire at the end of March. Under the stimulus bill, the extended benefits would be available through the end of 2009. The NELP estimates this will help about 3 million people.

•Provide money to states that agree to make benefits available to more workers. That would help at least 500,000 people, including some low-wage and part-time workers, who wouldn't otherwise receive unemployment benefits, the NELP says.

•Suspend the taxation of unemployment benefits up to $2,400.

The measure also helps the unemployed and others by increasing the maximum monthly food-stamp benefit by 13%, which lawmakers estimate will help 31 million Americans, half of them children. And the bill provides a subsidy to cover 65% of a worker's COBRA health insurance premiums for up to nine months. COBRA lets workers continue their former employer's coverage for at least 18 months.

By Barbara Hagenbaugh

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