Dollar Weakens After Unemployment Claims Rise

Applications for unemployment benefits rose from 27,000 to 412,000 last week, right before the dollar fell against most major currencies.

From ABC News:

The euro rose to $1.4460 in midday trading Thursday in New York, from $1.4441 late Wednesday. The British pound rose to $1.6348 from $1.6274. The dollar fell to 83.26 Japanese yen from 83.82 yen, and fell to 0.8925 Swiss franc from 0.8963 Swiss franc.

The U.S. dollar was also lower against most other currencies around the world, including ones in Canada, Australia, Hong Kong and Latin America.

More here

Jobless Benefits Cost so Far: $319 Billion

According to a CNN Money analysis of federal records, unemployed Americans have collected $319 billion in unemployment benefits since the recession began three years ago. This number is likely to be the center of a debate to extend benefits for the fifth time this year. But just as important, in 2009 alone, those payments kept 3.3 million people from poverty. Congress must act on unemployment before the end of this month or 2 million taxpayers will begin losing benefits.

CNN Money reports

The federal government has already footed $109 billion of the bill, and lawmakers are super-sensitive to adding further to the deficit. But advocates are turning up the pressure to extend the deadline to file for federal benefits.

Regardless of what Congress does, employers big and small will be paying the tab for years to come.

Businesses traditionally cover the cost of state unemployment insurance and up to 20 weeks of federal benefits, which kick in when a state experiences high levels of joblessness. At issue now are a third level of emergency benefits -- lasting up to 53 weeks -- first authorized by Congress in mid-2008.

Soaring unemployment has drained the state accounts that typically fund jobless benefits, forcing many states to borrow money from the federal government to cover their payouts. Currently, 31 states have $41 billion in loans outstanding.

Read more here

Jobless Claims Hit Half A Million

In a disappointing turn of events, the number of people applying for unemployment benefits hit half a million last week. The represents the highest unemployment numbers since November of 2009. This also marks the third week in a row claims have increased, which is a major disappointment to those who thought the economy was recovering.

"These numbers are important because they indicate the rate of growth in the economy is weakening and that the rate for growth is now insufficient to stop unemployment from rising," said Mark Zandi, chief economist for Moody's Analytics.

The latest jobless claims numbers, released by the Labor Department today, mark the third straight week that they've risen. In a healthy economy, jobless claims usually drop below 400,000. Right now, they've risen to 500,000.

In Washington, the grim numbers prompted a statement from President Obama.

"This morning's news that unemployment claims rose again compels us to act," he said this morning, touting a plan to promote hiring by small business.

Continue reading at ABCNews.com…

New Claims for Unemployment Aid Reach 484K

Last week, claims for unemployment benefits rose to the highest point in over 5 months. Although a drop was anticipated, instead claims rose by 2,000.

Read more from the Forbes.com story below.

New applications for unemployment insurance rose last week to their highest level in almost six months, a sign that employers are still cutting their staffs.

The Labor Department says first-time claims for jobless benefits edged up by 2,000 to a seasonally adjusted 484,000. Analysts had expected a drop. That's the highest total since the week of Feb. 20.

Initial claims have now risen in three of the last four weeks and are close to their high point for the year of 490,000, reached in late January. The four-week average, which smooths volatility, soared by 14,250 to 473,500, also the highest since late February.

The total number of people receiving benefits dropped 118,000 to 4.45 million, the department said.

Labor Dept. Estimates $7.1 Billion in Overpayments to Unemployed

Although headlines are focusing on the thousands of Americans that are losing, or have lost their unemployment benefits, the U.S. Labor Department is reporting over $7 billion in overpayment to the unemployed. As this story from ABC News explains, the total amount of unemployment benefits paid in 2009 was $76.8 billion, compared to $41.6 billion in 2008.

Fraud accounted for $1.55 billion in estimated overpayments last year, while errors by state agencies were blamed for $2.27 billion, according to the Labor Department. The department's final report will be released next month.

Some of the overpayments likely can be traced back to the overwhelming workloads facing state employment agencies during the recession, said George Wentworth, a policy analyst for the National Employment Law Project.

"You've got a system that's been under siege like the unemployment insurance system has been for the last two years," Wentworth said. "You've got a lot of new staff coming into the system; there's been a lot of federal extensions [to unemployment insurance benefits] that have had to be programmed in and so on. There's just been a lot of change that states have had to handle. ... I just think the volume and the new staff have made the systems more susceptible to error."

Continue reading at ABC News.com…

1.3 million Unemployed won't get benefits restored

Bad news for the millions of unemployed people across the nation. Congress failed to reach any agreement on unemployment benefits extensions before the 4th of July holiday. According to an article from the Associated Press, that leaves more than 1.3 million laid-off workers without benefits.

Each week that Congress pushes off a decision on this issue, an additional 200,000 people is left without unemployment compensation, which is disastrous to families, communities and the weak signs of economic stabilization. So, what’s the holdup?

Evidently Senate Republicans have filibustered three times in three weeks to keep the bill that would have extended these benefits from coming to a vote.
Senator Harry Reid stated, “We will vote on this measure again once there is a replacement named for the late Sen. Byrd.” Byrd’s successor will be named by Democratic Governor of West Virginia, Joe Manchin.

The unemployment bill would have provided up to 99 weeks of unemployment compensation, averaging $335, to people whose state benefits have expired. The benefits would be available through the end of November, at a cost of $33.9 billion. The money would be borrowed, adding to the budget deficit.

Read the full article here. And tell me your thoughts @ronideutch/Twitter or on Facebook.

Senate Combines Jobless Benefits, Homebuyer Credit

While still recovering from a failed attempt to extend unemployment benefits last week, Senate Democrats are working on a new bill that would combine the unemployment benefit extension with an extension of the homebuyer’s credit.

Sponsors of the legislation have said it aims to create more jobs and support the struggling real estate market. As this article from the Associated Press claims, Democrats are going to need to get a handful of Republicans on board if they want the bill to pass the Senate.

Under current law, homebuyers who signed purchase agreements by April 30 must close on their new homes by Wednesday to qualify for credits of up to $8,000. The bill would give those buyers until Sept. 30 to complete the purchases and qualify for the credit.

Democrats hope to pick up Republican support for the bill by combining the two provisions. They have been trying for weeks to pass an extension of unemployment benefits as part of a larger tax and spending package, but the larger bill died in the Senate last week.

Without an extension, unemployment payments would continue to be phased out for more than 200,000 people a week.

Many Democrats see the benefits as insurance against the economy sliding back into recession. Many Republicans, however, worry that adding nearly $34 billion to the budget deficit will only contribute to the nation's economic problems.

Continue reading at Google.com…

Unemployment Benefits Extension Nixed for Nearly 1 Million

According to CNN Money, over a million Americans have lost their unemployment benefits as Senators failed to pass an extension last Thursday. There were 57 votes for the legislation, but it was not enough to overcome the GOP filibuster of the bill.

Hoping to overcome deficit concerns, the Senate trimmed down the bill yet again on Wednesday night so that it would only increase the deficit by $33.3 billion over 10 years, instead of $55.1 billion. The main changes were to scale back additional Medicaid funding for the states and to reallocate some stimulus and Defense Department spending.

The bill will now be pulled, according to two Democratic leadership aides. This leaves many groups in flux, including the jobless who have lost their safety net, companies who are waiting to learn what tax breaks are extended, and governors who were counting on the additional funds to balance their budgets.

The grab-bag legislation pushes back the deadline to file for federal unemployment benefits until the end of November, renews expired tax provisions, lengthens a small business lending program and adds to infrastructure investments.

Continue reading at CNN.com…

Democrats' Tax Bill Moves Toward Vote In US Senate

The Senate is scheduled to vote on the new tax bill designed to extend unemployment insurance tomorrow. In order for the bill to pass, 60 of the 100 Senators will need to vote in favor of the legislation. Many Republicans and fiscally conservative Democrats are still weary of the bills price tag, and some bloggers are predicting the bill will not pass. Read more from this Reuters.com story below.

According to Reuters.com, Majority Leader Harry Reid moved toward an initial vote on the $126 billion earlier this week.

Under Senate rules, the vote on whether to limit debate on the legislation will likely occur Wednesday. Sixty votes are needed out of the 100-member Senate.

Complaints by fiscally conservative Democrats about the plan's price tag and opposition by some Democrats to the investment fund manager tax has stalled the proposal.

According to several lobbyists, the majority Democrats remain shy of the 60 votes necessary. They need to attract as least one Republican plus keep all of the 59 votes they generally hold in the chamber.

Over the next 10 years, the Senate proposal would increase direct spending by $126 billion and add $22 billion in funding to prevent a 21 percent payment cut to doctors in the Medicare program, the Congressional Budget Office estimated.

Continue reading at Reuters.com…

The Unemployed Held Hostage

From NYTimes.com:

Since June 1, when federal unemployment benefits began to expire, an estimated 325,000 jobless workers have been cut off. That number will swell to 1.25 million by the end of the month unless Congress extends the benefits. The Senate, so far, has failed to act.

Some senators, including Democrats, have balked at an unrelated provision that would begin to close a tax loophole enjoyed by some of the richest Americans. You heard right. Desperately needed unemployment benefits have been held hostage to a tax break for the rich, and the Senate’s Democratic leadership has had to delay and finagle to get its own caucus in line.

State-provided unemployment benefits generally last for 26 weeks, and the federal government picks up the tab after that, provided Congress approves the extensions. There is no disagreement over the need: 46 percent of the nation’s 15 million jobless workers have been unemployed for more than six months — a higher level than at any time since the government began keeping track in 1948.

There is not even any genuine debate about how to pay for extended benefits. An extension through November would cost about $40 billion. But unemployment benefits are correctly considered emergency spending — they are a vital safety net, and the money is crucial to supporting consumer demand in a weak economy — and exempt from pay-as-you-go budget rules.

Nonemergency provisions in the bill do need to be paid for, including renewal of several generally useful business tax breaks, like the research-and-development tax credit, totaling $32 billion over 10 years. To help cover those costs, Democratic lawmakers in the House and Senate started out with the sound idea to close an egregious tax loophole that allows wealthy fund managers at private equity firms and other investment partnerships to pay a top tax rate of just 15 percent on much of their earnings — versus a top rate of 35 percent for all other higher-income Americans.

House to Vote on Tax Bill as Net Cost Drops to $60.5 Billion

From the Wall Street Journal:

The latest version of House legislation to extend tax cuts and unemployment benefits would add $60.5 billion to the deficit over the next 10 years, the Congressional Budget Office said Friday.

The House took the first step toward passing the package. On a 221-199 vote, the House approved a rule setting up two votes later Friday. The House will vote on the jobless and tax package, then vote separately on a provision to postpone scheduled cuts in Medicare payments to doctors.

The new cost estimate from CBO appeared to give Democrats the needed confidence to move ahead, after lacking the votes all week.

The estimate reflects changes House leaders made to the package including eliminating spending programs created by the 2009 stimulus bill, expanded Cobra health insurance subsidies and increased federal Medicaid payments to states.

Those and other changes shaved the net cost of the package to $60.5 billion from $140 billion earlier in the week.

The total cost of spending and tax cuts in the package is roughly $116 billion. About $56 billion of that is offset by targeted tax increases on business, including the fund manager tax rate increase and changes in the way overseas income of U.S.-based multinationals is taxed.

More Than a Million May Lose Jobless Aid Due to Deficit Concern

From Bloomberg.com:

Since the U.S. recession began in December 2007, Congress has extended the duration of weekly unemployment benefits for the jobless three times. Now, the lawmakers may have reached their limit.

They are quietly drawing the line at 99 weeks of aid, a mark that hundreds of thousands of Americans have already reached. In coming months, the number of those who will receive their final government check is projected to top 1 million.

It’s a deadline that has rarely been mentioned in recent debates over jobless benefits, in which Republicans have delayed aid because of cost concerns. The deadline hasn’t been lost on Teauna Stephney, a 39-year-old single mother from Bothell, Washington, who said she could become homeless once her $407 weekly checks stop in June.

“What are people like me supposed to do?” said Stephney, who said almost two years of benefits haven’t proved long enough for her to find work after she lost her last job in August 2008. Referring to lawmakers, she said, “I would like them to come and talk to me and spend a day in my shoes.”

Democrats who have pushed through the past extensions agree there’s insufficient backing to go beyond 99 weeks, largely because of mounting concern over the federal deficit, projected to reach $1.5 trillion this year.

More Than 200,000 Jobless Counting On An Extension

A million Americans could lose their unemployment benefits this month if the Senate does not act quickly to extend the benefits, as well as deadline to file. According to CNNMoney.com, Senators are supposed to vote when they come back on Monday, but if they wait until later in the week it could leave thousands of Americans without benefits.

These folks were expected to stop getting checks this week after lawmakers failed to extend an April 5 deadline to file for federally-paid benefits before adjourning for a two-week recess. A total of a million people could lose benefits this month if the Senate doesn't act, according to the National Employment Law Project.

When they return Monday, senators are scheduled to take the first vote needed to push back the deadline until early May.

A final vote, however, is unlikely to come until later next week. Monday's move is a procedural step that simply allows lawmakers to consider the bill. Democrats need at least one Republican to join them to get the legislation past this hurdle.

Though the measure generally enjoys bipartisan support, it has gotten caught in the divisive politics pervading Capitol Hill. Republicans blocked the extension's passage late last month, saying the $9 billion bill should be paid for.

Continue reading at CNN Money.com…

Unemployment Benefits, Canceled Debt Trigger Tax Bills

The last thing most of us want to think of in this economy is an unexpected tax bill. However, as Sandra Block of USA Today explains, financial hardships can often result in a tax bill instead of a refund. Block explained a few situations that can lead to owing taxes in this new article. You can find a few of her examples below.

Taxes on unemployment benefits. Millions of Americans who have been out of work for months are relying on unemployment benefits to put food on the table. In November, Congress extended benefits by up to 20 weeks for workers in states with high jobless rates.

But what many people may not realize is that some of those benefits are taxable. The economic stimulus package enacted last year excluded the first $2,400 of unemployment benefits from 2009 gross income. For unemployed married couples, each spouse is eligible to exclude up to $2,400 in benefits.

Taxpayers who receive unemployment benefits should receive Form 1099-G, which shows the amount of benefits you received for the year. You should report unemployment compensation that exceeds $2,400 on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ.

Continue reading at USA Today.com…

Some Relief for the Nation's Unemployed

Recent reports seem to indicate that while the economy may find its way out of the current recession and job growth is on the horizon (See article on job growth) the nation's unemployment rate is unlikely to be effected.

Although this is undoubtedly disheartening for the jobless, there is a bit of silver lining when it comes to unemployment benefits. If you haven't heard already, there's good news for those who were unemployed at any time in 2009 and collecting unemployment benefits. These taxpayers are entitled to a special tax break when they file their 2009 federal tax returns. This tax break is part of the American Recovery and Reinvestment Act (ARRA) of 2009.

Here are five important facts you need to know about your unemployment benefits:

1. Unemployment compensation generally includes any amounts received under the employment compensation laws of the United States or of a specific state. It includes state unemployment insurance benefits, railroad compensation benefits and benefits paid to you by a state or the District of Columbia from the Federal Unemployment Trust Fund. It does not include worker's compensation.

2. Normally, all unemployment benefits are taxable; however, under the ARRA, every person who receives unemployment benefits during 2009 is eligible to exclude the first $2,400 of these benefits when they file their federal tax return.

3. For a married couple, if each spouse received unemployment compensation, then each spouse is eligible to exclude the first $2,400 of benefits.

4. You should receive a Form 1099-G, Certain Government Payments, which will show the total unemployment compensation paid to you in 2009, in box 1.

5. All you have to do is subtract $2,400 from the amount in box 1 of your Form 1099-G to figure out how much of your unemployment compensation is taxable and then report this amount on your federal tax return, do not enter less than zero. You must report unemployment benefits received on your tax return.

Finally, if you collected more than $2,400 in unemployment benefits in 2009, don't forget to claim a deduction for your job-hunting expenses. Tips on expenses you can include in the job-hunting deduction can be found here.