Kicking the unemployed while they're down

North Carolina’s unemployed, and the state, will be hurt by GOP cuts in benefits.

January 9, 2013 

Republican leaders in the General Assembly are treating the unemployed residents of this state more as enemies than victims. A proposal to cut unemployment benefits and to reduce the amount of time people can receive them is petty, hurtful and unnecessary.

It will take a toll on families dependent on those benefits to stay in their homes and to put food on the table. And it seems to be advancing as the legislature prepares to begin its long session at the end of this month.

The N.C. Chamber, a business lobby, is pushing this measure, which is likely to pass in a legislature dominated by Republicans. The reason? The state has a $2.5 billion debt to the federal government, incurred when North Carolina had to borrow money from Washington to pay unemployment benefits during the Great Recession.

The state has to start paying the money back, and the Chamber’s solution, with GOP leaders dutifully following the Chamber’s marching orders, is to cut maximum benefits by a third, reducing the top payment from $535 a week to $350 and cutting the maximum weeks of benefits from 26 to a sliding scale of between 12 and 20 weeks, depending upon the unemployment rate. There are some other tweaks as well, including making folks wait two weeks rather than one week before benefits kick in.

“No state has ever cut their maximum benefit so severely,” said George Wentworth of the National Employment Law Project after the measure came out of a committee Tuesday.

State Sen. Floyd McKissick of Durham said, “I just think we need to have some compassion and respect for people who are probably at the most difficult and challenging point in their lives.”

He had it right, exactly.

So what’s the point? Well, if the state does this to average citizens, the debt to the feds will be paid by 2015 instead of by 2018. For this, lawmakers are willing to hurt families in this way?

Yes, because without the cuts, the federal government would require that employers pay higher unemployment taxes, which would rise by $21 per year, per employee, until the debt was paid off.

Would that put a burden on some businesses? Surely it would. But it is a temporary burden, unlike a cut in unemployment benefits (benefits that hardly are generous to begin with) that could put families on the street.

And that result, which would be inevitable for some, would mean that those families would have nothing to spend with local merchants, thus hurting small businesses.

Paying off the debt over three additional years would allow the unemployed to avoid desperation and poverty, letting them hold on to a financial flotation device, a temporary one.

And let’s not buy into the argument from some cynics that cutting benefits would be some kind of encouragement for people to look harder for jobs. Most are looking. They want to work, and the average weekly payout of about $300 is hardly capable of putting them in the league of the rich and famous.

Republicans in the General Assembly do not have to do this. The rush to pay off the debt is foolhardy if it means that families in this state who are trying to recover from a financial setback they could not have anticipated will themselves be set back, again.

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