They will lose their federal unemployment benefits by the end of this year if Congress fails to extend the program into 2013, the Colorado Department of Labor & Unemployment said Tuesday.
The recipients -- most of whom are in the Denver-Fort Collins corridor -- will be cut off even if they haven't exhausted all 37 weeks of federal benefits that Congress approved in September, according to department spokesman Bill Thoennes.
Now, unemployed residents receive up to 26 weeks of jobless benefits from the state and 37 weeks financed by Uncle Sam. During this recession, which began in December 2007, Congress approved federal extensions lasting up to a record 73 weeks beyond Colorado's 26-week maximum.
But all that generosity seems likely to end this year, spelling bad news for not just the 31,000 people about to be cut off but tens of thousands of other Coloradans who will exhaust their state benefits next year and won't have federal benefits to count on while they look for work.
"There are about 39,000 Coloradans who are currently receiving state benefits with five weeks left on their claim. None of those claimants will receive any additional payments when they complete week 26 by early February," Thoennes wrote in an email.
The national unemployment rate was 7.7 percent in November, according to the U.S. Bureau of Labor Statistics. Colorado's rate was slightly higher last month -- 7.9 percent.
President Barack Obama is asking for $30 billion for an unemployment extension in his latest proposal to avert the "fiscal cliff," a combination of tax increases and spending cuts set to take effect in January unless Congress reaches a deal averting it by Dec. 31.
The GOP plan by House Speaker John Boehner doesn't call for additional jobless assistance and Republicans may not support an extension as Congress looks for programs to cut or scale back to reduce the national deficit.
While Obama and Boehner haven't reached a deal, there have been recent signs that they are inching closer to a compromise. They have until Dec. 31 to reach an agreement that would prevent taxes from going up for most people and federal programs from being cut by about 9 percent early in the new year.
In the past, Congress allowed people to receive payments for the duration of the extended benefits. This year, however, Congress has decided to cut off federal unemployment assistance even if recipients haven't exhausted all the weeks under the federal extension, said Maurice Emsellem, a policy analyst at the National Employment Law Project's Oakland office.
The average weekly unemployment benefit in Colorado is $353. The minimum weekly payment is $28 and the maximum is $513, Thoennes said.
Nationwide, 2.1 million people are scheduled to lose federal jobless benefits on Dec. 29, which marks the end of the last full week in 2012, according to a recent report by Democrats on the House Ways and Means Committee.
The nonpartisan Congressional Budget Office says repeated unemployment extensions in the past five years have cost $520 billion.
In fiscal year 2007, when the average unemployment rate was 4.5 percent, the federal government paid out $33 billion in jobless claims, CBO said.
In fiscal 2012, which ended on Sept. 30, Uncle Sam's cost was $94 billion as more people were thrown out of work and the average unemployment rate reached 8.3 percent.
Republican lawmakers balk at the cost of another extension and some critics have argued that extending unemployment checks may discourage people from looking for work.
Democrats argue that extending unemployment benefits is the responsible thing to do.
Earlier this month, 42 Democratic senators -- including Colorado's Michael Bennet -- wrote to Senate leaders to press for an extension into 2013.
"Unemployment insurance is one of our best economic stabilizers and generates tremendous bang for the buck relative to other economic policies," the senators said. "Given the potency and efficiency of unemployment insurance there should be no reason to let it lapse or expire."
The number of Coloradans in select counties who would lose their federal unemployment benefits if an extension is not approved by Congress:
-- Denver: 1,394
-- El Paso: 1,263
-- Arapahoe: 1,098
-- Adams: 1,051
-- Jefferson: 920
-- Larimer: 430
-- Weld: 428
-- Boulder: 378
-- Douglas: 318
-- Broomfield: 83
Source: Colorado Department of Labor & Employment
By RAJU CHEBIUM, Gannett Washington Bureau