Monday, December 21, 2009

Recession and Divorce: Help Is on the way

Help from the Government may be a silver lining

No one can argue with the fact that this nation has suffered the worst recession since the Great Depression. Everyone has experienced some kind of financial setbacks. Many have lost their jobs, homes, and their sense of worth.

Even harder hit are people going through a divorce. Even in the best of economies, the financial and emotional toll taken on people engaged in a divorce is high.

Washington is responding in their own way to the problems by creating stimulus programs to ease the pain. One of the programs on the verge of phase out may be getting new life and be broadened to include other steps to help those in need of financial relief. The programs I am referring to includes the First Time Homebuyer Credit and Unemployment Benefits.

This program is being extended by H.R. 3548.

The House is poised to send the White House a bill extending aid to over a million people in danger of exhausting jobless benefits and additional tax credits for prospective homebuyers crucial to rejuvenating the housing market.

The $24 billion package also contains tax credits aimed at struggling businesses. The House is scheduled to vote on the legislation Thursday, a day after the Senate passed it 98-0.

With some 7,000 people running out of unemployment benefits every day and the current $8,000 tax credit for first-time home buyers set to expire at the end of the month, President Barack Obama is expected to quickly sign the measure into law.

House Majority Leader Steny Hoyer, D-Md., said the bill was "vital to Americans who have lost their jobs as a result of the deepest recession in over three-quarters of a century."

The bill would provide every American running out of unemployment insurance benefits this year with an additional 14 weeks. The out-of-work in states with jobless rates at 8.5 percent or greater would get six weeks on top of that.

It would also extend for seven months the $8,000 tax credit for first-time homebuyers that were enacted as part of the $787 billion stimulus package passed last February. The program would be expanded with a $6,500 credit for homebuyers who have lived in their current residences for five years.

Finally, it would allow businesses that have incurred losses in 2008 and 2009 to seek refunds for taxes paid on profits over the past five years.

The package, said Sen. Jeanne Shaheen, D-N.H., a leader on the unemployment issue, will "help nearly 2 million Americans who are still unable to find work, protect small businesses struggling in this challenging economic climate and stimulate economic activity to help create jobs and grow our economy."

The extension would be the fourth since June of last year and could result in giving an out-of-work person in one of the harder-hit states up to 99 weeks of benefits, well above the previous record of 65 during the 1970s.

Supporters argued that this help was necessary when 15 million unemployed are competing for about 3 million jobs and the unemployment rate continues to inch up despite some signs of economic recovery.

"There is no place today in the United States that does not see a serious crisis in unemployment," said Democratic Sen. Jack Reed of Rhode Island, where the 13 percent unemployment rate exceeds the national rate of 9.8 percent.

The $2.4 billion cost of extending unemployment benefits is offset by extending through June 2011 the federal unemployment tax that employers pay for each employee.

All families struggling with job losses, devalued homes and continued economic uncertainty will benefit from this bill. The Bill is clearly good news for those people trying to sell their home as part of a divorce settlement and trying to make ends meet while they look for new employment to support themselves and their children.