Federal unemployment benefits for people unemployed more than 27 weeks expired Saturday, cutting off an estimated 45,000 Massachusetts residents as negotiations over the so-called fiscal cliff stalled.
Those affected are mostly the long-term unemployed, who will file their final claim this week. About 2 million people nationwide are expected to lose benefits, according to the National Employment Law Project.
A benefits extension has been mired in the negotiations over spending cuts and tax increases but in an emerging deal on Monday, Democrats appeared to have won a full-year’s extension of unemployment insurance costing $30 billion cost. No agreement, however, has been finalized.
Congress first approved the extra unemployment benefits in 2008, during the worst recession since the Great Depression, and as voted to reauthorize them 10 times.
State officials prepared recipients for the cutoff last month, sending a letter informing them that the last week to qualify would end Dec. 29.
The benefits rollback comes as negotiations on the fiscal cliff appear stalled in Congress, meaning tax increases and automatic spending will go into effect as soon as Tuesday. Many economists have predicted that the US economy will tumble into recession because the impact of these austerity will come at weak point in the nation’s recovery.
Massachusetts faces an especially bumpy ride. University of Massachusetts researchers recently calculated that the state would be one of the most worst hit by a dramatic drawdown in federal spending. According to MassBenchmarks, the economic journal of UMass, the state could lose as many as 50,000 jobs in the next three years if if automatic spending cuts by the federal government take effect.
The researchers noted that Massachusetts would lose many high-paying jobs that make the region a technology mecca. If political leaders are unable to reach a compromise, Massachusetts stands to lose billions in Defense Department, National Institutes of Health, and other federal spending that supports research and innovation the state.