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@NCCapitol

US Labor Secretary criticizes state unemployment bill

Posted February 11, 2013
Updated February 12, 2013

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— The General Assembly's plans to reduce the amount and duration of unemployment insurance in North Carolina, and as a side-effect cut off federal benefits in the state, has attracted the attention of Acting U.S. Labor Secretary Seth Harris, who took the unusual step of issuing a news release on a piece of state legislation. 

For those who haven't been following this issue, North Carolina owes the federal government $2.5 billion to repay money borrowed to pay unemployment claims during the recession.

To minimize mandatory tax increases on businesses, lawmakers are pushing through a bill that will cut how much a worker may collect in weekly benefits and the duration of those benefits.

Under the bill, federal emergency extended benefits would be cut off for all state recipients, including unemployed military veterans. Such changes will trigger a provision in federal law that cuts off federal benefits provided to workers who have been unemployed longer than 26 weeks, when state benefits currently end. 

The full Senate is due to hear the bill at 2 p.m. Tuesday. Watch it LIVE on WRAL.com.

Harris pegs the number of workers who could lose extended federal benefits at 170,000, much higher than the 80,000 to 100,000 estimates that have been bandied about the state. According to an email provided by The Associated Press, the federal government estimates that 104,000 will lose their federal unemployment benefits immediately on July 1. Another 66,000 people who would have become eligible for federal benefits between July 1 and the end of the year also would not have access to the extended unemployment insurance program, according to that email. 

Harris says the federal government will have "no discretion" to cut off the aid. 

In his news release, Harris wrote:

"The North Carolina legislature is considering legislation that would reduce state Unemployment Insurance benefits. If enacted, the legislation also would cut off all federally funded Emergency Unemployment Compensation – that is, benefits after 26 weeks of unemployment – to 170,000 unemployed North Carolinians. This cutoff is automatic under federal law. I have no discretion to stop it. As a result, families struggling to secure their place in the middle class will suffer a grievous blow, and the state's economy will lose $780 million in federal funds that are vital to reducing North Carolina's high unemployment rate.

"We know that for every dollar spent on Unemployment Insurance benefits, nearly $2 are generated in the local economy. Unemployed workers and their families spend these benefits in local grocery stores and small businesses and use them to stay current on mortgage or rent payments and utilities. For these reasons, UI programs are vital to economic growth in difficult times, particularly in states like North Carolina with high unemployment rates."

60 Comments

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  • frosty Feb 12, 6:51 p.m.

    170,000, that depends on if you believe the Obama administration or the AP both very iffy propositions.

  • junkmail5 Feb 12, 5:12 p.m.

    Not a single employEE has ever paid unemployment insurance in North Carolina. EVER. -beachboater

    Well, yes and no.

    There's a pretty solid argument that that is money that could go into your paycheck if it didn't cover the unemployment insurance instead.

    Just like the $x the employer pays toward your healthcare could go into your check if he wasn't spending it for healthcare.

    Did anyone realize that the FEDERAL unemployment tax, again paid only by the employER, DOUBLED this year because of the debt from the state to the feds? And it will stay at that rate until the loan is paid back- beachboater.

    That's the POINT. That's the CORRECT way to fix the problem. Because it was those employers who benefitted for unreasonably state tax rates that CAUSED THE PROBLEM.

    So they should have to pay it back.

    Instead the state is shoving much of that debt on the backs of the unemployed.

  • beachboater Feb 12, 4:55 p.m.

    "What some people don't get is every employee and employer pays into these benefits and most never have to use them"

    Not a single employEE has ever paid unemployment insurance in North Carolina. EVER.

    Did anyone realize that the FEDERAL unemployment tax, again paid only by the employER, DOUBLED this year because of the debt from the state to the feds? And it will stay at that rate until the loan is paid back.

    North Carolina has cut the benefit period in the past. And can you guess what happened each time? Unemployment went DOWN.

    Obama wants to again extend unemployment benefits beyond 99 weeks in his budget wants.

    Thie state and this country do not have the money to continue endlessly paying these UT benefits. We're paying people to stay home and not work for 2 years!!! If someone hasn't found a job in 6 months, chances they are not looking, don't want to work, or they are unemployable.

    I don't think there are many that are unemployable.

  • beachboater Feb 12, 3:59 p.m.

    "and the state's economy will lose $780 million in federal funds that are vital to reducing North Carolina's high unemployment rate."

    Now tell me again, just how does cutting off unemployment benefits help reduce the unemployment rate? I guess we must be encouraging people to go back to work while we pay them to stay home.

  • remer54 Feb 12, 3:12 p.m.

    55+ and lost my job. UI didnt come close to paying bills for a while soaked up saving Guess Ill work for nothing and go to the er if somethings happens to me.When I went to a meeting at the esc they put about 12 of us in a room. I was the youngest one of the group. A couple of ladies in there had worked at the same place forever. I could see the pain in one of them face. Don't worry one day it may be you.

  • dryjr Feb 12, 3:05 p.m.

    He just said that the feds are cutting it off,but we should continue,what a hypocrite,

  • SouthernPackerFan Feb 12, 2:48 p.m.

    Really? LOL. It's unemployment insurance, not a way of life. Dumbocrats extended the benefits to buy votes, i.e. pander to a specific voting block.

    Unemployment insurance is only supposed to last so long and the Feds had no right to extend it in the first place.

    Get a job.

    immaannoid
    Maybe you should "Get the Facts" the House voted for the Extention in Benefits, and who pray tell controls the house?

  • junkmail5 Feb 12, 2:31 p.m.

    . Don't you realize that the current benefit pays as much or more than a lot of these unemployed were making.- wheelman

    No, I don't because that's not true.

    The UE payment is always a _percentage_ of what you earned when employed.

    It's mathematically impossible for it to be MORE than you made.

    In most cases it's tremendously less.

    The only people making more than $290/week are folks who were making a LOT more than min-wage when employed.

    You might wanna learn how the program actually works before trying to speak intelligently about changing it, huh?

  • goldenosprey Feb 12, 2:14 p.m.

    Looks like readme has never been 50+ and laid off by her employer, with a mortgage, bills, insurance, etc. in a state with 9% unemployment. See how fast you lose your savings and your health, then see how long it takes to find suitable employment.

    Try sticking to things you have a clue about.

    Wheelman, if you made minimum wage you will not be getting $350/ week. You will receive much less. The employer that dumped you will scarcely pay more but you will get muuuuuch less.

  • Mon Account Feb 12, 2:01 p.m.

    "It might sound cruel but we need to stop giving all the freebies to illegal immigrants." - Disabled Veteran

    Naw, it just sounds ignorant. This is a conversation about US citizens getting unemployment benefits. These illegals of which you speak don't get unemployment benefits.

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