The Obama Administration weighed in Monday on the states plans for cutting unemployment benefits, with the Acting U.S. Secretary of Labor saying its a bad idea.
The state Senate is set to vote this week on a bill that would reduce weekly unemployment benefits. That, in turn, will mean that federally funded emergency unemployment benefits will end July 1.
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, Acting Labor Secretary Seth D. Harris said in a statement.
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 states economy will lose $780 million in federal funds that are vital to reducing North Carolinas high unemployment rate.
We know that for every dollar spent on unemployment insurance benefits, nearly two dollars 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.
The state is reducing benefits to pay off the $2.5 billion it borrowed from the federal government to pay unemployment benefits during the recession.
State Rep. Julia Howard, the Mocksville Republican who shepherded the bill through the House, said legislators worked for months on the unemployment legislation before the prohibition on states changing weekly benefits became part of the fiscal cliff deal.
The federal Obama Administration argues for more give-aways, to print more money. Howard said. We would like to get our North Carolina plan solvent.
Obama Administration officials made some calls to the state last week to suggest the state borrow the money to repay the debt, Howard said, but theres no stomach for that in Raleigh.
We beat that horse to death, Howard said. When you have bond indebtedness, that has to be paid the same amount of money from the same people. That was the only suggestion that they made.
Advisory council recommended
The states Rural Economic Development Center issued a report Monday calling for Gov. Pat McCrory to create a North Carolina Manufacturing Council that would develop policy for the state.
The council would examine the labor needs of the manufacturing sector, identify markets for the products produced here, and identify factors that are keeping North Carolina from being more competitive.
The council would also work with government and industry to come up with practices to accelerate growth in manufacturing. The Rural Center report says the council should be established by May and deliver an agenda by May 2014.
The report is the product of a yearlong effort by the Rural Center to determine how to better create job and income growth in the states manufacturing sector. In March, the Rural Center plans to offer other recommendations for expanding manufacturing opportunities, particularly among small firms in rural portions of the state.
McCrorys office didnt immediately respond Monday to a request for comment on the council recommendation.
Medicaid expansion supported
About 14 doctors, nurses and medical students came to Raleigh to speak against a bill that would prevent the state from expanding Medicaid under the Affordable Care Act.
Its nutty, said Dr. Charles van der Horst, a professor of medicine at the University of North Carolina in Chapel Hill. Its terrible for the citizens of North Carolina.
The Senate passed a bill last week preventing expansion and a state House committee is set to debate it Tuesday.
About 500,000 more people would be insured under the expansion, with the federal government picking up all the costs for most of the new people for the first three years and 90 percent afterward.
State Rep. Jim Fulghum, a neurosurgeon from Wake County, said he did not know how he would vote on the bill, and was looking forward to more debate.
I just think we have a lot more to learn, said Fulghum, a Republican.
Fulghum said the bill has enough votes to pass.
Fox taps Luddy
Raleigh businessman Bob Luddy will appear Tuesday on Fox Business News to give what is being billed as the small business reaction to the State of the Union.
Luddy is president and CEO of Captive-Aire Systems, a commercial kitchen ventilation manufacturer. He also is a leader of the Job Creators Alliance, a nonprofit group of business leaders who advocate for free enterprise. He will appear at 11 p.m. on Fox Business News Stossel, according to the group.
Staff writers Lynn Bonner, David Bracken and John Frank
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