As Midnight Deadline Looms, Long-Term Unemployed Face Loss of Benefits

Many unemployed Americans are keenly awaiting congressional action on the latest extension of jobless benefits. With a midnight Tuesday deadline looming, some 2 million jobless workers face losing their only source of income in coming weeks as Democrats and Republicans spar over how to pay for the $12 billion extension, which would provide payments through February.

State agencies and businesses are concerned that the cessation of benefits may take a toll on local economies. The payments, which average $310 a week, are a lifeline for many unemployed workers, helping them to pay rent and put food on the table.

'Worst Time of Year' for Benefits to End

Of the roughly 14.8 million Americans out of work, about 8.5 million are receiving unemployment benefits. "This is the worst time of year to be running out of benefits," Nancy Dunphy, New York state's deputy commissioner of labor for employment security, told

Retailers fear the dropped payments will result in fewer sales at a time of year when businesses rely on consumer purchases the most. But the loss of benefits could affect traffic at everyday merchants, too, including gas stations and grocery stores, which are likely to see transactions dwindle as unemployed workers go without.

The subsequent loss in business could result in as many as 700,000 more lost jobs as employers cut back further, according to the National Employment Law Project, a nonprofit organization that advocates on behalf of workers. So far this year, benefits extensions have helped 9.5 million households and pumped roughly $6.8 billion into the economy every month, the organization says.

A Decision Could Come After the Deadline

Not everyone receiving unemployment payments faces losing benefits next month, since it depends on when workers signed up and in which states they live. However, jobless Americans who have exhausted their initial 26 weeks in state benefits are already blocked from applying for federal extended benefits, since the cutoff to apply for those was last weekend, CNNMoney noted.

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Amid the recession, the federal government began a multilayer program to extend benefits to workers in hard-hit states. The federal program is divided into four tiers of emergency unemployment compensation, which last between six and 20 weeks, followed by up to five months of extended benefits.

Congress has acted four times in the past year to extend benefits for unemployed workers -- at times doing so after a deadline had passed, resulting in beneficiaries receiving retroactive payments. Whether Democrats can revive legislation to pass yet another extension in the face of Republican opposition remains to be seen.

The topic is expected to top the list of concerns when President Obama and congressional leaders meet briefly Tuesday. Whether an agreement can be reached is unclear, however, leaving those who risk losing benefits in the dark -- at least for now.