Another kind of fiscal cliff looms for 2.1 million jobless Americans, including thousands of Minnesotans.

Their unemployment insurance benefits will expire at year's end unless Congress renews a program that gives extra aid to people who have used up their six months of state unemployment checks.

Rep. Sandy Levin, a Michigan Democrat, has called the program's scheduled end a "human cliff." Letting it expire could save the federal government $30 billion, but the cost to more than 12,000 Minnesotans would be severe.

"They're not going to be able to pay the rent, they're not going to be able to pay utilities and it's the middle of winter," said Maurice Emsellem, a policy analyst for the National Unemployment Law Project.

The benefits expire across the nation on Dec. 29, and hopes that Congress will reauthorize them dimmed after lawmakers left Washington last week without striking a deal on the fiscal cliff. Unemployment benefits have become a bargaining chip in the stalled negotiations between Congress and the White House.

Sue Frenzel, 59, of Minneapolis, is halfway through her 26 weeks of regular state unemployment, so she still has time to find a job. She is looking for one as a legal secretary. Though she's aware that she may not receive a federal extension, she's not alarmed.

"I've got unemployment until March, and I will be trying to get a job that I want," said Frenzel, who minimizes her expenses by living in an apartment and not owning a car.

If she doesn't find a job by the time her state unemployment expires, she said, "I've got some savings and I'll live on that until it's gone."

But for families who've been treading water financially, losing benefits on Dec. 29 could be devastating.

"It's very scary. People are extremely vulnerable," said Andrea Ferstan, director of income strategies for Greater Twin Cities United Way.

Thousands of Minnesotans could find themselves looking to charity and local government for basic needs like food, shelter and energy bills. Shame, embarrassment, anger, fear and mental health problems are common. "It can have sort of a cascading, domino effect in people's lives," Ferstan said.

United Way 2-1-1, the referral service, pointed 50,000 people to help with basic needs in the third quarter. That number will likely increase if these unemployment benefits expire.

Federal funding for jobless aid skyrocketed during the recession, nearly tripling from $33 billion in 2007 to $94 billion in 2012, as the government extended benefits to limit the damage of prolonged unemployment.

In 2008, Congress created the Emergency Unemployment Compensation program, which offered up to 53 extra weeks of benefits to the long-term unemployed. Aid varied by state and changed by the year because it's tied to unemployment rates.

In Minnesota, where the unemployment rate is two points lower than the national average, the program now offers 14 extra weeks of unemployment checks to those who have exhausted their first 26 weeks. In California, Nevada and New Jersey, among others, the long-term unemployed can get an extra 47 weeks.

Early warnings issued

Most people who would lose their benefits shouldn't be taken by surprise. In November, state officials started notifying the 12,200 who will be affected, said Blake Chaffee, spokesman for the Minnesota Department of Employment and Economic Development. Job training officials have been trying to schedule one-on-one meetings with them.

Unemployment benefits have been shrinking for more than a year in Minnesota as the unemployment rate has improved. More than 46,000 Minnesotans used up their benefits in the past year either because they exhausted their federal extension or didn't qualify for one.

A separate program that offered an extra 13 weeks of jobless aid -- known as the Extended Benefits program -- started to phase out in Minnesota at the end of 2011. "When we hit 6.5 percent unemployment, the extended benefits ended," Chaffee said.

While earlier lapses in unemployment benefits have been gradual, what's set to happen on Dec. 29 will be abrupt. People who have reached their basic 26 weeks will receive a check for the last workweek of the year, and then benefits will stop.

Economic impact

Emergency Unemployment Compensation has always been temporary, but Congress has renewed the program 10 times since 2008.

The National Unemployment Law Project estimates that a million Americans will stop getting checks immediately when the program expires on Dec. 29. Another million will see other unemployment benefits expire over the first three months of the new year.

Letting the program expire could also cost the economy 300,000 jobs and two-tenths of a percent of GDP growth because of the lost income and consumer spending, the Congressional Budget Office estimates.

Joe Orvik, 48, of Minneapolis is philosophical about his unemployment payments ending after 26 weeks. The environmental technician is halfway through his state benefits. Although he most recently had a job searching for leaks at an oil refinery, he's periodically gone off unemployment to take short-term jobs.

"If push comes to shove, I'll get a job doing just about anything," he said. Congressional inaction "is a macro social phenomenon, and I don't have any control over it."

Emsellem, from the National Unemployment Law Project, is less philosophical. Congress shut down for Christmas break, and 2.1 million Americans could be about to lose their last source of income, on average about $300 per week.

"It's an insult to unemployed workers," Emsellem said. "It's about as clear-cut as it gets." • 612-673-4405 • 612-673-4553