LANSING – Legislative Democrats unveiled a proposal Monday that would extend unemployment benefits by 13 weeks when the jobless rate rises above 5 percent, as well as increase the weekly maximum unemployment benefit to $408 from $362 and tie it to inflation increases. But their Republican counterparts said the package would hurt businesses by increasing costs and making Michigan less attractive for new jobs.

Speaking at a series of press conferences throughout the state, House Democrats revealed a five-prong approach to aiding the unemployed in Michigan, which also includes increasing the weekly benefit allowance from $6 to $20, increasing the multiplier benefits are calculated from by 0.3 percent (4.1 to 4.4 percent) and increase the multiplier that calculates the number of weeks a worker can receive benefits from 43 percent to 45, as well as round unemployment benefits up to the nearest dollar. Currently, benefits are rounded down.

“This great state of ours was built by workers,” House Minority Leader Dianne Byrum (D-Onondaga) said. “Many workers are victim of Michigan’s faulty economy.”

Byrum said that with the Legislature approving tax cuts for Michigan businesses, such as General Motors, Delphi and Ford, it is now time to focus on Michigan families that have been impacted by layoffs in the state.

Rep. Michael Murphy (D-Lansing) said it is important to get this legislation passed because with gas, home heating and food prices growing, “A dollar doesn’t stretch as far as it used to.”

“Laid off workers shouldn’t have to worry about how they are going to put food on the table or how they will pay for their medication,” he said.

Byrum did not have an estimate on how much the Democratic proposal would cost, but said there looks to be $380-$400 million in the unemployment trust fund by the end of the year.

But some Republicans fear the Democratic plan will put an unfunded burden on the trust fund, which would result in having the costs be absorbed through employers paying higher taxes or higher prices on families. Estimates from the Republican camp suggest the fund already will continue to loose money throughout the next two years with the unemployment program that is in place now.

On the business side, some Republicans fear the proposal would force companies to cut back its benefits, such as job training and retirement savings for employed workers, to pay for the increased cost of unemployment benefits. The proposal also would increase the costs of good and services for Michigan consumers, hurt small businesses and make companies looking to expand uncertain about their plans because of unknown future costs for unemployment, Republicans say.

But Byrum argued that the Democratic proposal is legitimate to helping Michigan’s economy because people receiving unemployment benefits use it in the local economy by purchasing food, gas and basic household items.

“It’s not someone putting money into a 401(k),” she said, adding had the Legislature enacted the inflation contingency initiative before, then there would not be such a large gap in funding for unemployed workers.

“Families are legitimately struggling,” Byrum said.

Republicans also pointed to the proposal as making Michigan not in step with other states that offer unemployment benefits, saying that only Massachusetts and Montana provide more than the standard 26 weeks of unemployment benefits. However, Byrum argued that Illinois and Minnesota also give extended benefits to unemployed workers comparable to the Democratic plan.

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