North Carolina: First State To Reject Federal Aid For Long-Term Unemployment


The "First in Flight" State, North Carolina, has now become the first state in the Union to reject federal money and put an end to unemployment benefits for 70, 000 people on Monday. The state legislature made the decision citing saving businesses money and to make extra payments on a debt they have which is due in 2015, rather than had been assumed in 2018.

WRAL reports:

State officials adopted the package of benefit cuts and increased taxes for businesses in February, a plan designed to accelerate repayment of a $2.5 billion federal debt. Like many states, North Carolina had racked up the debt by borrowing from Washington after its unemployment fund was drained by jobless benefits during the Great Recession.

The changes go into effect Sunday for North Carolina, which has the country's fifth-worst jobless rate. The cuts on those who make unemployment claims on or after that day will disqualify the state from receiving federally funded Emergency Unemployment Compensation. That money kicks in after the state's period of unemployment compensation — now shortened from up to six months to no more than five — runs out. The EUC program is available to long-term jobless in all states. But keeping the money flowing includes a requirement that states can't cut average weekly benefits.

Because North Carolina leaders cut average weekly benefits for new claims, about 170,000 workers whose state benefits expire this year will lose more than $700 million in EUC payments, the U.S. Labor Department said.

Republican leaders who control the General Assembly sought an exception to the federal law two months before voting to change unemployment benefits. Congress last year allowed Pennsylvania, Indiana, Arkansas and Rhode Island to proceed with cuts to weekly benefits that their legislatures had approved for after the expected expiration of federal benefits, which later were extended. North Carolina's request was never acted on.

Overall these changes will mean that $3.6 billion in benefits will be cut, according to the General Assembly's fiscal research office. Cuts to the unemployed make up about 74% of that figure.

Businesses in North Carolina currently pay about $42 per employee to help pay back the federal debt, which fell to $2.1 ($2,144,184,708.62) billion in June. That money, which was borrowed to cover state-funded unemployment benefits after unemployment soared beginning in 2008, triggered higher federal unemployment taxes for businesses.

Without the cuts to unemployment benefits, businesses would see an increase of $21 per employee per year until the debt is paid.

"You've got to pick a point in time where you solve the problem. They picked a point in time that allowed us the most time to pay the debt as quickly as we can and get a new program in place so that we can help people find work," said Gary Salamido of the North Carolina Chamber. "It's a very unfortunate circumstance for everybody involved."

Democrats blasted Republicans at a news conference last Wednesday saying that they were heartlessly "punishing" the long-term unemployed at a time when the state has the fifth highest unemployment rate in the nation at 8.8%.

The Raleigh News & Observer reports:

They also complained that North Carolina is the only state in the nation that has taken action that will prevent workers from receiving extended, federally funded unemployment benefits that kick in after jobless workers exhaust their state-funded benefits.

"This is getting to be a mean, mean place for people at the bottom and working families in this state," said Senate Minority Leader Martin Nesbitt of Asheville.

"Why is that necessary when this benefit is 100 percent federally paid?" asked Rep. Larry Hall of Durham, the House Democratic leader.

Apparently Hall doesn't understand that Federal funds come from State taxpayers. He also doesn’t understand that it is just incurring more debt and helping to sinking the State financially.

The new law cuts the maximum unemployment benefit by about one-third, from $535 a week to $350, and slashes the maximum weeks of benefits from 26 to a sliding scale between 12 and 20 weeks.

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  • SOCIALISM-MUST-GO!

    Federal debt is fraudulent extortion fabrications that the monster Fed government has forced upon the people and the various states against their actual will! The fed Monster Dictatorship does this criminally in collusion with the Federal Reserve, It is time for the states and the people to take back their rightful authorities and stop participating in these
    RICO EXTORTIONIST PROGRAMS OF WASTE AND FABRICATED DELUSIONS!
    They don't care how much of your $ they waste ,just as long as there is plenty of it!

  • becky

    Good for North Carolina! Now get the weeks back to 13 like it should be. If people can't live forever on the TAXPAYER'S DOLE, they might start voting more wisely and get rid of all these Communists who value COLLECTIVE MISERY!

  • ARMYOF69

    Unfortunately , those who now cannot graft more monthly payments out of NC tax payers, will travel to a state nearby for MO MONEY.

    • becky

      Welfare is supposed to require RESIDENCY Army. If they don't require it, it is up to the taxpayers in the new state to start screaming at their lying Reps in the State government. Sooner or later we WILL get this country back away from the Communists running it - into the ground - now.

  • smoothy

    Feeling real good about yourselves are you? People lost they're jobs through no fault of their own, many of whom are in their 50's and 60s. No employer wants to hire and too young to retire. Just kick 'em while they're down. That'll solve the problem. Pathetic...

  • john4637

    Go get 'em North Carolina!!

  • aposematic

    If not for ObumaNOcare, this move would lower NC unemployment rates big time. But, with ObumaNOcare preventing hiring, this move will be painful for the NC unemployed. However, the continued Federal loans to cover for the devastation caused by ObumaNOcare was putting all NC citizens in peril not just the unemployed. ObumaNOcare doing its intended purpose of destroying America's middle class.

    • becky

      Exactly aposematic. Can't institute Communism with an active middle class.

  • bull57

    This is really a tough call. If there are no jobs it's tough to get one. The benefits at the highest levels puts a family at the poverty level. I guess I applaud NC for making a tough decision. The coffers are dry and people just need to find anything I guess!

    • becky

      Go look at some of the old censuses from the early 1900's bull. People MOVED to go with the jobs. We need to stop all this welfare bullsh*t and force people to work again. If they don't get paid for sitting on their deadbeat butts when they're able-bodied just MAYBE they'll stop voting for Communists who want NO jobs for Americans. You know bull, that "COLLECTIVE" misery crap the commies want for ALL of us - except themselves, of course.

    • bull57

      Your points are well made. Matter of fact we moved 30 yrs ago because there were few opportunities where we lived. We did become successful with the move. I never thought of the votes either! I give your posts 5 stars...

    • becky

      Why thank you sir! Appreciate it - and your story.

  • Kent2012

    With the african pretender and his wheeling and dealing communist clowns doing their best to bust the economy and turn this country into a wonderland like say, oh yes Cuba. Now there is a wonderful place, a nirvana if you will, my guess would be that it will work in the same way the amnesty vote - oh sorry - immigration reform vote, works...you get unemployment benefits for two years and then "whiffo, bango" you are transferred to the welfare roles with full benefits and you do not even need a photo ID..!!!.....wow only in America.....

  • osohappy2bme

    Feelin' pride again in the Old North State!

  • Jack Parker

    How long is a person "unemployed" before he becomes a deadbeat?

  • onooop

    Give em hell north Carolina!!!!

  • Brian Davids

    By 'Great Recession', are you referring to the 1930's Great Depression?