An estimated 1.3 million Americans will lose their unemployment benefits after an emergency federal program expired on Saturday.
Lawmakers failed to agree on an extension of the scheme before the Congress began its winter recess.
Former President George W. Bush introduced the assistance plan in 2008 at the start of the recession.
Under the program, jobless people received an average monthly stipend of $1,166 for up to 73 weeks.
The White House says the benefits have kept millions of families out of poverty, but many Republicans argue that the scheme’s annual $25 billion price tag is too expensive.
The stalemate comes two months after a budget fight in the US Congress led to the partial shutdown of the government.
President Barack Obama has vowed to push for the renewal of the expired program when Congress reconvenes in early January.
“The president said his administration would, as it has for several weeks now, push Congress to act promptly and in bipartisan fashion to address this urgent economic priority,” White House spokesman Josh Earnest said.
An estimated 1.3 million people will initially be cut off with the end of the “emergency unemployment compensation”, US officials say.
Millions more could be affected next year after they lose state benefits, which in many states expires after six months.
The financial aid was designed to help US citizens who lost their jobs during the recession and were unable to find new work while receiving the state benefits.
The US unemployment rate fell to a five-year low of 7% in November, according to the US Labor Department.
But the long-term jobless rate remains a problem for the economy, with some 4.1 million Americans currently out of work for six months or longer.
There has been repeated political wrangling between the Republicans, who control the lower house – the House of Representatives – and the Democrats, who have a majority in the upper house, the Senate.
Because of disagreements between the two houses over federal government spending, the Congress failed to pass a budget before the fiscal year ended on September 30.
Both sides eventually struck a last-gasp deal in October to end the federal shutdown and raise the federal debt limit.
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