If Congress is unable to reach agreement on a deal to avoid the so-called “fiscal cliff,” the biggest losers will not be taxpayers, whose tax rates are merely returning to 2002 levels, but the 2.1 million Americans—and their families—whose unemployment benefits ran out as of December 29. That was the expiration date of the federal Emergency Unemployment Compensation program, a Labor Department program that extends unemployment compensation to long-term unemployed workers who have already collected all regular state benefits for which they were eligible.

Given the poor prospects for a fiscal cliff deal, Democrats plan to introduce legislation preserving the Bush tax rates for incomes up to $250,000 a year and extending the unemployment benefits program through next year, which would cost $30 billion, according to the Congressional Budget Office.

“I believe such a proposal could pass both houses with bipartisan majorities – as long as these leaders allow it to come to a vote,” said President Barqck Obama in his weekly address. “If they still want to vote no, and let this tax hike hit the middle class, that’s their prerogative – but they should let everyone vote. That’s the way this is supposed to work.”

Meanwhile, some economists argue that a benefit cut-off, combined with the end of the payroll tax cut, could throw the nation back into recession, which would cause even more unemployment and needless human suffering. Some also contend that the recent holiday shopping season suffered poor sales partly because of the looming fiscal uncertainty, including the benefits cutoff.

If all this seems strangely familiar, it’s because in summer 2010, extended unemployment benefits actually lapsed for several weeks while the Senate argued and dithered over funding before finally passing legislation. That time, recipients received lump sum retroactive benefit checks, which is expected to be the case this time around as well, assuming a deal is reached.

-Matt Bewig

To Learn More:

Congress Almost Certain To Blow Unemployment Deadline (by Arthur Delaney, Huffington Post)

Extended Emergency Unemployment Compensation will Expire for 2.1 Million Recipients on December 29 (by HoundDog, DailyKos)

Half a Million Long-Term Unemployed Lose Benefits Earlier than Expected (by Noel Brinkerhoff, AllGov)