Today, 1.3 million long-term unemployed workers sit restlessly in Congress' palm. They will be left without federal unemployment benefits just three days after Christmas if Washington fails to rework the budget deal to extend the Emergency Unemployment Compensation Program (EUC).
The EUC extends federal benefits to people who are unemployed when state benefits run out. Typically, states provide benefits to unemployed workers for up to six months. But during the 2008 subprime crisis, President George W. Bush established the EUC to stem the damage, as joblessness hit a peak of 10% in 2009.
Lawmakers have extended the program 11 times over the past five years. Some people have received benefits for 99 weeks, and the EUC has doled out $225 billion in benefits over its lifespan.
But fresh signs of economic recovery, including the latest jobs report and now a U.S. Federal Reserve taper, finally point to the program's close. Government-reported analyses state that businesses have created almost 200,000 jobs total over the last four months, the economy grew faster than anticipated in the third quarter, and the majority of economists are forecasting stronger growth in 2014.
In light of this favorable data, Democrats agreed to cut the program during this month's negotiations over the federal budget. The budget deal builds in a $22 billion deficit reduction that cuts $85 billion over two years, while allowing a $63 billion increase in spending caps.
Were the EUC extended again, it would cost around $25.7 billion for one year, according to the Congressional Budget Office - and would thereby totally undermine the budget deal's savings.
And recent jobs numbers have made the long-term unemployed especially vulnerable to a benefits cut...
The Plight of the Long-Term Unemployed
There are 4.1 million people currently classified as long-term unemployed, according the Bureau of Labor Statistics. That's 36.1% of the total unemployed.
To put that number in perspective, the population of long-term unemployed remains higher than in any time during the Great Recession that ended in 2009. It's over three times the percentage of long-term unemployed in 2007, which reached 17.5%.
November's jobs report showed unemployment at 7% - its lowest level since November 2008. Plus, the economy added 203,000 jobs.
But better numbers have actually wounded the long-term unemployed.
The jobless rate is used to calculate unemployment rates. States cut benefits and benefit duration when the jobless rate is lower, per the mathematical formula they apply.
State benefits average about $300 per week. Sequester cuts over this summer trimmed federal benefits to $256 weekly.
After the Dec. 28 expiration date, an additional 850,000 people will run out of state unemployment benefits during the first quarter of 2014.
And another 1 million will lose state benefits by June if they are still without work.
That's a grand total of 3,050,000 Americans with no unemployment benefits come June, if Congress does nothing to extend the EUC program.
A benefits extension creates spending that supports 310,000 jobs, according to the Economic Policy Institute. And it increases direct spending by consumers by around $25.7 billion, according to the CBO.
So, whether or not you agree with extending the EUC program, its status will invariably affect your wallet - millions of long-term unemployed with absolutely no income will place a drag on the economy.
In January, the Senate is expected to vote on a bill that would reinstate the benefits for another three months, but that would still leave the affected workers with, at minimum, a gap without pay.
The budget deal that fails to extend the EUC passed the Senate last Wednesday, and hidden in the details is one of the best investment opportunities you will find in 2014...