Benefit cuts: A body blow to the unemployed

GOP legislative leaders plan to deal a cruel blow to the state’s unemployed.

January 28, 2013 

The federal government already has appropriated the money to cover benefits for tens of thousands of unemployed North Carolinians through 2013, which was part of the legislation that made the deal between the White House and Congress to avoid the “fiscal cliff.” Yes, unemployment benefits were extended for many left in the cold by the Great Recession, and the federal government is paying all of it, which would be about $25 million a week in North Carolina, going to approximately 85,000 workers.

But Republicans in the General Assembly, apparently completely disengaged from the woes of the unemployed, have decided they’ll revamp the state’s unemployment system, and they’re going to do it soon, by July 1, which will mean the state will give up that federal money for the remainder of the year. The federal government benefits are conditioned on states not altering the weekly unemployment benefit, and GOP legislators are planning to cut it from over $500 a week to about $350 a week at the top level. (The average is about $300.)

That means federal unemployment benefits will be gone for those dependent on it. Just because of the blind ideology of the leaders of the General Assembly.

Rep. Julia Howard of Mocksville, Republican head of the House Finance Committee, offers this preposterous view: The unemployment program is too generous and encourages people to become reliant on benefits.

Hand the tell-the-truth medal to Harry Payne, the former Democratic labor commissioner, who responded to the proposed action this way: “If anyone wants an example of thoughtlessness, I’ll hold this piece up high. This is about not understanding what people are going through.”

Exactly. If Howard bothered to try to understand the plight of those who have been unemployed for long periods after productive working lives, she’d understand that most if not virtually all of them desperately want to find work and can hardly cover their bare-need expenses on what they receive in unemployment compensation. Maybe groceries, some house expenses. But their savings are taking a tremendous bruising, which will hurt them in the long term.

And Payne makes another point that one would think might get the attention of all those pro-business Republicans now running the legislature. If people lose their unemployment benefits, they’ll have nothing to spend, which will have a multimillion-dollar effect on all businesses, particularly small and medium-sized ones.

This action would be ludicrous. The federal program costs the state nothing. It is painless for the state budget. It helps North Carolinians from falling into poverty.

Yes, North Carolina does owe $2.5 billion to the federal government because the state couldn’t afford to pay its share of unemployment compensation after the Great Recession, and, yes, that money is to be paid back over time. The source for additional money to pay it is a boost in federal unemployment taxes for businesses of $21 per year, per worker, until the debt is paid. Accelerating that payoff, which is one of the reasons cited for cutting benefits and the length of time they’re paid, won’t make much of a difference in how long it takes to get square with Washington. The debt will be paid three years sooner. And over that, Republican lawmakers are willing to hurt thousands of families?

The proposed cuts are coming just weeks after Republican Gov. Pat McCrory gave his Cabinet secretaries raises of a combined 8 percent so they “can afford to live.” Advocates for the unemployed have challenged him to live a week on $350. There’s no need for that. Instead, assuming the cuts go through, McCrory should greet the bill with his first veto.

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