After Congress failed to renew the bill to extend federal benefits for long-term unemployed Americans, more than 1.3 million jobless Americans will stop receiving unemployment assistance starting on Saturday.

While Democrats have been pushing to preserve federal benefits for those Americans who have been out of work for more than six months for three more months, some Republicans say that they will only be willing to negotiate if Dems agree to cut spending in other areas.

Other GOP leaders, like Sen. Rand Paul, fundamentally disagree with the general prinicple of extending the program at all.

"I do support unemployment benefits for the 26 weeks that they're paid for," said Sen. Paul, according to the New York Times. "If you extend it beyond that, you do a disservice to these workers. When you allow people to be on unemployment insurance for 99 weeks, you're causing them to become part of this perpetual unemployed group in our economy."

The Effects

According to the Congressional Budget Office, keeping emergency benefits in place during 2014 would add about $25 billion to federal deficit. However, because recipients tend to immediately spend the money they receive in unemployment benefits, economists say that they help drive the economy.

Next year, the economy will suffer due to the loss of benefits, which will in turn drain billions in consumer spending. People losing their federal benefits reported that they were forced to cut back on Christmas spending, drive less, turn off their heat, tap into their retirement accounts, apply for food stamps, depend on family support and missed mortgage payments, reports the NYT.

The Economic Policy Institute has said that the end of the program will also cut job growth in 2014 by about 310,000 positions. Plus, Michael Feroli, a chief economist at JPMorgan Chase, estimates that the loss of income will cut the country's annual growth rate by about 0.4 percentage points in the first quarter of 2014.

Analysts also believe the end of the federal program will lead to more Americans falling below the poverty line.

The Solution

Backed by President Obama, Republican Sen. Dean Heller and Democratic Sen. Jack Reed have proposed a bipartisan bill to extend benefits for three months, reports Fox News. Economic adviser to the president Gene Sperling says the Senate will hold a vote on the proposal as soon as Congress returns from their holiday break in January.