RALEIGH, N.C. — The decision of North Carolina lawmakers to cut the amount and length of state unemployment benefits took effect Sunday, stripping federally funded checks from the state's 71,000 long-term jobless.
The U.S. Labor Department says another 100,000 will be cut off in the coming months.
The reduced benefits and smaller increases in business taxes are the state's cure for repaying Washington $2.5 billion borrowed to pay state unemployment claims that exploded during the recession. The reduced state benefits have the effect of making North Carolina the first to cut off a federal unemployment compensation program for the long-term jobless.
The plan's supporters say it'll save businesses more than $400 million by paying back the billions three years early. Opponents say Republican lawmakers and Gov. Pat McCrory should have waited until January, after the federal benefits expire.
Bill sponsor Sen. Bob Rucho, R-Mecklenburg, said the state's unemployment fund was not designed to pay long-term benefits.
"What we are trying to do is put it back to its original, intended purpose," he said. "So that it will be available, it will be solvent for the next group of unemployed people in the state of North Carolina."
Democratic congressmen David Price and G.K. Butterfield expressed disappointment Monday with the decision that cut off benefits.
"This is not politics as usual," Price said in a statement. "North Carolina is the only state in the country losing extended federal benefits because of the General Assembly and Gov. McCrory’s decision to punish people who have lost jobs through no fault of their own. It is one of the most extreme and damaging acts I have seen in my time in government."
"I am deeply troubled that the state government has terminated the Emergency Unemployment Compensation program," Butterfield said in a statement. "I continue to urge Gov. McCrory and the General Assembly to reverse this decision."
U.S. Sen. Kay Hagan also criticized the measure.
"Our state's unemployment insurance debt is not new, and legislators in Raleigh have had plenty of time to address the issue," she said in a statement. "It's disappointing that they've chosen to do so in a way that is not only unbalanced and detrimental to our state's recovery but will also still result in tax hikes."
Republican Congresswoman Renee Ellmers declined to comment, saying the move was a state decision.