Window closing soon on jobless benefits

JACKSONVILLE, Fla. -- Jobless since January, Donald Money has already moved in with his elderly parents, stopped going to the movies and started using less of his prescription medication so it will last longer.

This month, something else will fall by the wayside: Money's unemployment check. The 43-year-old former printing press operator is among the more than 1.3 million Americans whose unemployment insurance benefits will run out by the end of the year, placing extra strain on an economy that is just starting to recover from the worst downturn in a generation.

These are the most unfortunate of America's 14.5 million jobless: the ones whose benefits are drying up, in some cases after a record 18 months of government support.

With savings depleted and job opportunities scarce, people who have run out of benefits are living with relatives and borrowing cash from friends. They are even skipping meals. Through it all, they are trying to stay positive.

Many are scrambling to find work before they have to reach for the next layer of government aid -- food stamps or even welfare.

The U.S. Department of Agriculture reported yesterday that more Americans than ever before received food stamps in June, with more than 35 million Americans receiving assistance. That was 22 percent higher than in June last year.

People who lost white-collar jobs seem most surprised by the dire circumstances they are finding themselves in as unemployment benefits dry up. Before the recession and financial crisis, it had always been easy for them to find work.

Clifford Sheffield, 43, of Fernandina Beach, Fla., used to earn $2,000 a week as an analyst for Merrill Lynch's Jacksonville office.

Today, Sheffield lives off of a $1,300 monthly check from the government -- and is burning through his savings to keep up with rent. The unemployment benefits run out this month.

At a recent job fair, he perused applications for Valu Pawn and Taco Bell, but did not fill them out.

"I have family I could fall back on, but it's not very appealing," Sheffield said.

"People are just barely getting by," said Sue Berkowitz, the director of the South Carolina Appleseed Legal Justice Center, an advocacy group that helps the poor with legal issues surrounding rent and mortgage contracts. "When I go down to our food bank, I see a lot of people who never, ever thought that's where they would be."

In the past year, nearly 5.5 million people exhausted their 26 weeks of standard benefits without finding work. The government says the "exhaustion rate" is the highest on record, dating to 1972.

About 3.4 million people now depend upon extended benefits approved by Congress lasting anywhere from 20 weeks to a year -- the longest period of extensions ever added. The length of these extensions vary by state, depending on the unemployment rate. More than half of all states have unemployment rates that triggered 53 weeks of extended benefits.

The government does not track how many jobless Americans have exhausted both their standard and extended benefits, but experts estimate the figure to be nearly 100,000 -- and rising.

According to the National Employment Law Project, more than 402,000 Americans will exhaust their unemployment benefits by the end of this month. That figure will more than triple by the end of December unless another extension is authorized by Congress -- or individual states.

Unemployment benefits play an important part in stabilizing the economy because recipients tend to spend their weekly checks, rather than saving the money or paying down debt.

"It's definitely a valuable component of economic stimulus," said Alan Auerbach, a professor of economics at the University of California, Berkeley.

Sheffield, the former Merrill Lynch analyst, said he has some job leads and is beginning a retraining program to become a radiographer. He has done some odd jobs around his neighborhood for cash and has cut back on most of his expenses -- even his $25-a-week comic book hobby.

"I don't drink or smoke, and I can't go to lunch or anything like I used to with my friends," said Sheffield, who runs on the beach to relieve stress. "I eat less. I've lost 20 pounds."