Proposed cuts to jobless benefits heading to General Assembly

Posted January 8, 2013

— State lawmakers will consider cutting jobless benefits when they return to Raleigh this month after a legislative committee approved changes to the unemployment program on Wednesday.

Under the proposal approved by the Revenue Laws Study Committee, a group of House and Senate lawmakers, the maximum weekly benefit for someone out of work would drop from $535 to $350. Also, the state would replace its 26 weeks of benefits with a cap of 12 to 20 weeks, based on the health of North Carolina's economy.

If approved by the General Assembly, the proposed cuts would affect people who apply for unemployment benefits starting in July.

The changes are to help North Carolina repay the $2.4 billion it owes the federal government for jobless benefits assistance during the recession.

The state borrowed money from the U.S. Department of Labor to pay unemployment benefits during the depths of the recession, when payments to the surging number of idled workers far outstripped the money flowing into the state trust fund through unemployment insurance taxes paid by businesses.

North Carolina's unemployment debt is the third-highest in the country, behind only California and New York.

The changes would help the state repay the unemployment debt by 2015 – three years faster than a normal repayment schedule – which officials said would keep federal unemployment insurance rates on North Carolina companies from rising each year to cover the debt.

Sen. Floyd McKissick, D-Durham, urged lawmakers to think twice about cutting benefits, saying people looking for work depend on that money to get by.

Unemployment NC cuts could affect up to a third of people on unemployment

"When you're looking at people who are unemployed and you're looking at that money being their only lifeline for survival," McKissick said, "it deeply concerns me when you're looking at such a vast reduction from $535 down to $350. ... I just think we need to have some compassion and respect for the fact that people are at probably the most difficult, challenging points in their lives."

But Rep. Edgar Starnes, R-Caldwell, countered that few people would be affected by the lower maximum benefit.

"To be eligible for that $535 unemployment benefit today, you have to be a high-income earner," Starnes said. "These high-income earners – these are executives and people like that – have other resources that the average worker doesn't have.

"The reductions to the middle-class and the average worker (are) minuscule," he added.

Larry Parker, a spokesman for the state Division of Employment Security, said the maximum benefit cut would hit anyone who makes at least $56,640 a year.

George Wentworth, senior staff attorney with the National Employment Law Project, said the cut could affect up to a third of the people on unemployment, noting that anyone earning more than $36,400 a year would qualify for more than $350 a week in jobless benefits.

In addition to cutting benefits, lawmakers proposed raising unemployment insurance rates on businesses to accelerate repayment of the debt and ensure the unemployment trust fund remains solvent. About 20 percent of North Carolina employers have paid no unemployment insurance and would have to start contributing to the system under the proposal.

Worker advocates have called for businesses to bear a greater share of repaying the debt, noting that the state slashed unemployment insurance rates in the 1990s.

"I feel like we're being cheated of something that should be there as a security buffer," said Rose Henderson, who's been looking for work for 13 months. "Now it's taken away, and I just feel like it's going to throw us that much farther back."

Wenworth said the smaller benefit checks could hurt the economy.

"The average unemployed worker is going to spend that money on food, on rent, on mortgages, on clothing for their children – basically put all of that back into the local economy," he said.

Sen. Bob Rucho, R-Mecklenburg, said the unemployed and businesses need to share the burden.

"(Businesses are) paying their share, the workers are assisting," said Rucho, co-chairman of the Revenue Laws Study Committee. "We've expanded the base. We've done everything we can do to make sure that the unemployment insurance plan is going to be solvent and available for the next group whenever the next recession comes. We are at the worst level of debt ever."

Joyce Brooks, who hasn't had a permanent job in at least two years, said unemployed workers are getting a raw deal.

"It's about greed – point blank. Why should they give us something more when they could make more?" Brooks said.


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  • free2bme Jan 9, 2013

    Please come back to reality. Stop blaming President Obama. The GOP ran this country in the ground during the Bush years an now Americans are paying dearly. President Obama promotes personal responsibility, he is the true example that hard work pays off. Nothing was handed to him on a silver platter. The General Assembly will likely cut unemployment benefits to pay for the mess they created. They seem to care nothing about regular working, middle class or poor people.

  • GK N.Ral Jan 9, 2013

    Can't survive on unemployment benefits? You know the answer.

  • goldenosprey Jan 9, 2013

    Don't you get it? Lower benefits and slash benefit periods, then displaced workers will have no choice but to accept lower wages and poorer working conditions. Keeps wages low for everyone. Has nothing to do with moochers. If it did, they would go after actual moochers like Big Agri Business, Big Pharma and the mythical welfare queen. All part of Pope's plan.

  • lprop Jan 9, 2013

    Instead of looking at the unemployed who did work and are only receiving unemployment while they look for a job they need to look at the ones who are on welfare and don't want to work. Wake up educated leaders.

  • WooHoo2You Jan 8, 2013

    the company I worked for was able to CHEAT ME OUT OF MY DISABILITY BENEFITS AND WORKER'S COMPENSATION...and no one cared....- dollibug

    The GOP says companies should not be "burdened" with regulation and oversight...something that might have helped you. How is that working out for you again?

  • WooHoo2You Jan 8, 2013

    When is the last time you heard him say we need more jobs?....... He doesn't even speak of jobs anymore....just welfare and unemployment.- lessismore

    Maybe you should get your news from more than just blogs, youtube, and 106.1 if you want to hear that. Sorry Obama (or anyone for that matter) can't make you actually pull your head out of the sand and see the real world!

  • junkmail5 Jan 8, 2013

    .Obama has expanded ever welfare program on the books. -lessismore

    No, he hasn't.

    Food stamps began climbing when Bush took office 2001 FYI

  • WooHoo2You Jan 8, 2013

    Whoohoo2you.....Obama has expanded ever welfare program on the books......he loves unemployment. He loves welfare....it got him re-elected. He wants to expand welfare and bring down the middle class and put as many of them on welfare as possible.- lessismore

    If that is the case why do red states (republican) use more "entitlement" dollars per person than blue states (democrat)? Bet you can't answer that one....

  • WooHoo2You Jan 8, 2013

    Woohoo2you.....name anything Obama has done to help America......you can't.- lessismore

    Recession over, lower illegal immigration, better access to education, ending two wars, universal access to healthcare, protecting individual rights, expanded VA benefits....should I go on?

  • dollibug Jan 8, 2013

    Perhaps the NC General Assembly should just CUT PEOPLE OFF COMPLETELY FROM WORKER'S COMPENSATION AND UNEMPLOYMENT BENEFITS ALSO....I was wrongfully denied my claim for worker's compensation and then I was laid off of my job 2 days after I had surgery....the company I worked for was able to CHEAT ME OUT OF MY DISABILITY BENEFITS AND WORKER'S COMPENSATION...and no one cared.....how exactly do these people think people can LIVE???????????????? Perhaps the government needs to *REDUCE THEIR OWN SALARIES, benefits and perks....*share the wealth*....I think is what the prez said needed to be done...