President Barack Obama at a speaking engagement while on vacation in Hawaii.
Kent Nishimura-Pool/Getty Images

Extended federal unemployment benefits came to a sudden halt Saturday for an estimated 1.3 million Americans, creating potentially major implications for the recovering U.S. economy, the Associated Press reports.

The situation has set the stage for a fierce political battle when Congress reconvenes in the new, midterm election year, the AP reports.


The issue is important enough that President Barack Obama even called two senators over the Christmas holiday to offer his backing in their drive to have Congress extend the benefits. He also pledged Friday to push Congress to move quickly next year to address the "urgent economic priority," the White House said.

The end of the federal government's "emergency unemployment compensation" will mean tough times as enrollees lose their average monthly stipend of $1,166, the report shows. And analysts worry that the economy could suffer with less money for consumers to spend on everything from clothes to cars. Having let the "emergency" program expire as part of a budget deal, it's unclear if Congress has the desire to take it up again.

Sens. Jack Reed (D-R.I.) and Dean Heller (R-Nev.) have introduced a bill offering a three-month extension, and Senate Majority Leader Harry Reid (D-Nev.) has promised to bring it up in the new year, the AP reports.

On Friday, the AP reports, Obama told Reed and Heller he was pleased they were working together to address the problem. "It defies economic sense, precedent and our values," Obama’s economic adviser Gene Sperling said in a statement.


Read more at the Associated Press.

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