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State flag of North Carolina superimposed on map of the state.
The lather, rinse, repeat cycle of cutting taxes on businesses, then using the crisis that creates as an excuse to cut benefits to average people is in full swing on unemployment insurance benefits. Now, North Carolina is next up in the wave of states cutting jobless benefits to make up for unemployment insurance trust funds left underfunded by big cuts to employer unemployment taxes prior to the recession, and North Carolina's planned cuts are the most vicious of any state so far.

The North Carolina legislature plans to cut both the number of weeks of benefits unemployed people are eligible for and the amount they can collect weekly. What's more, that action would cause federal benefits to be cut off for many long-term unemployed people. Acting Secretary of Labor Seth Harris is so disturbed by this prospect he issued a statement ahead of the North Carolina state legislature's final vote on the cuts:

"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 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."

But anything to avoid the dread raising business taxes, amiright? Then, if North Carolina's economy ever recovers and unemployment is low again, a future legislature can use that as an excuse to cut employer unemployment taxes yet again, while keeping these benefit cuts in place.

12:34 PM PT: The state Senate took the next step toward the cuts Tuesday afternoon:

The Senate voted 36-13 in favor of House Bill 4 on second reading. A final vote is expected Wednesday, after which it would need to return to the House for agreement on minor changes.

Gov. Pat McCrory has already said he will sign the bill into law.

Originally posted to Daily Kos Labor on Tue Feb 12, 2013 at 08:31 AM PST.

Also republished by In Support of Labor and Unions.

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Comment Preferences

  •  I spent over a year drawing unemployment. (9+ / 0-)

    Even though the amount was small compared to my former salary it helped put food on the table while we struggled to get back on our feet. This is about as cruel as it gets. Absolutely no value placed on human life whatsoever and this is your family values party (HA).

    Republican philosophy: Cause a recession and put millions out of work and when you realize they're costing you money cut off their benefits. Priceless.

    Oh and drug tests. Just because.

  •  Guess they'd rather have... (8+ / 0-)

    ...whole new waves of foreclosures and tent cities.  And fewer people to buy the products of those businesses they thought they were helping.

    Then those businesses die.  Then more layoffs.


    If only those dumb fucks would just follow the dominoes.

    Boehner Just Wants Wife To Listen, Not Come Up With Alternative Debt-Reduction Ideas

    by dov12348 on Tue Feb 12, 2013 at 08:52:32 AM PST

  •  The philosophical core of the Republican Party: (7+ / 0-)

    Kicking a man when he's down is the best way to get a shoe shine.

    •  Many of the state UE changes result from the 2011 (1+ / 0-)
      Recommended by:

      federal "overhaul" of the entire Unemployment Insurance system.

      Here's an excerpt from a September, 2011, CNN piece, after the President's speech on this topic:

      "Obama proposes sweeping changes to unemployment benefits"

      NEW YORK (CNNMoney) -- The nation's unemployment benefits system would undergo extensive changes under the jobs proposal President Obama outlined Thursday.

      Calling it "the most sweeping reforms to the unemployment insurance system in 40 years," the administration wants to broaden the program beyond its core mission of sending checks to the jobless. The expanded goal: helping the jobless transition back to the workplace.

      Among the "sweeping changes" are the states' ability to obtain waivers, in order to restructure their UE systems by cutting benefits, and making the UE system somewhat more along the lines of the "Welfare To Work" model.  [Requiring, in some instances, work in exchange for UE benefits.]

      Here's the link to the CNN piece.  

      Which is not to say that some Republicans governors won't take full advantage of this law, or "go overboard" in their reforms.  But a reading of this law indicates that the purpose, or intention of it, was to pare down benefits.

      This can be done by putting folks in job programs, and in general, making the eligibility requirements much more stringent.

      Here's the link to a summary of the American Jobs Act.

      And here's the link to the entire American Jobs Act.


      "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

      "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

      by musiccitymollie on Tue Feb 12, 2013 at 10:10:40 AM PST

      [ Parent ]

      •  (CNNMoney) -- The 99ers? Call them the 73ers. (1+ / 0-)
        Recommended by:

        Here's an even a CNN piece that outlines some of the specific cuts to UE benefits that were passed in 2012, such as cutting the maximum number of weeks the jobless can collect unemployment benefits will be reduced to 73 weeks.

        Here's an excerpt from the piece, and the link to the article entitled:  "Congress Restructures Unemployment Benefits,"

        Beginning later this year, the maximum number of weeks the jobless can collect unemployment benefits will be reduced to 73 weeks.

        The legislation, which Congress approved Friday, calls for unemployment insurance to be reduced in two stages. States with lower jobless rates will see federal benefits trimmed starting in June. The full cut will go into effect in September.

        Lawmakers also revamped parts of the unemployment insurance system, by allowing drug tests of certain recipients and permitting states to use the funds to subsidize employment. The legislation also creates national job-search requirements for everyone collecting either state or federal benefits.

        The jobless have been able to collect up to 99 weeks of benefits since November 2009, as part of the nation's unprecedented response to the Great Recession.

        This piece is dated February 17, 2012, so I guess that this story just went "under the radar" due to the election "horserace" reporting, LOL!


        "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

        "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

        by musiccitymollie on Tue Feb 12, 2013 at 10:25:03 AM PST

        [ Parent ]

    •  It's the cheapest way. They don't care about (1+ / 0-)
      Recommended by:

      quality unless they're so rich they can't keep track of what they spend.

  •  2014 election (0+ / 0-)

    Will become very interesting if this passes.

  •  "N.C. alone in plan to reject $650 million in (6+ / 0-)

    federal jobless benefits"

    “As far as we know, North Carolina is the only state considering this (loss of benefits),” Labor Department spokesman Michael D’Aquino said.
    The decision to turn down federal extended benefits “is without precedent nationally,” said George Wentworth, a senior staff attorney with the nonprofit National Employment Law Project.
    “No other state has even considered cutting their weekly benefits because that means taking tens to hundreds of millions of dollars out of their state economy, money being provided at no cost to that state’s employers.”

    This is unbelievable.

  •  Feds are supposed to decertify these UT Programs (0+ / 0-)

    Federal DOL under the very unwatchful eye of Hilda Solis (too busy trying to help the illegals) is supposed to decertify UT programs that are below the Federal Standards.  Once a State's UT program is decertified all employers in that State then pay the Federal UT Tax at 6.2% instead of .8%.  All these GOP Governors should not get away with this but the walked all over Hilda.

    Glad she's gone.

  •  Why is the state doing this? What on earth could (3+ / 0-)
    Recommended by:
    ColoTim, Mostel26, llywrch

    justify losing over half a billion dollars from the federal government, that could go into the NC economy?  What is the legislature's logic on this?

    That's one more thing to add to my long list of small problems. --my son, age 10

    by concernedamerican on Tue Feb 12, 2013 at 09:11:22 AM PST

  •  This article is a very good summary (4+ / 0-)

    North Carolina Unemployment Bill Would Lose State 600 Million in Federal Benefits

    Isn't it becoming an inescapable conclusion that the entire country is becoming the Milgram experiment with the sadists in charge?

    “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR

    by Phoebe Loosinhouse on Tue Feb 12, 2013 at 09:31:30 AM PST

  •  And NC has the 5th highest rate in the country (3+ / 0-)
    Recommended by:
    ColoTim, Mostel26, NoMoreLies

    (At least if you're only counting states, as Puerto Rico is several points higher than all the rest).

    According to Google public data, the top 6 states are:

    Nevada: 10.2%
    Rhode Island: 10.2%
    California: 9.8%
    New Jersey: 9.6%
    North Carolina: 9.2%
    Michigan 8.7%

    The overall national rate is 7.8%.

    It's amazing to me that, even with a rate 1/2 point higher than Michigan, we are considering anything near this stupid. Independent of whether or not it's humane, it doesn't even seem to be sensible. All of those people without benefits are going to consume even less than they do already, cutting the profits of the same businesses that don't want to pay higher unemployment taxes. Of course, once they have to lay off workers due to lower sales they'll get to pay lower nominal taxes even if the rates stay the same.

  •  I guess their vote for Romney was sincere. (2+ / 0-)
    Recommended by:
    Mostel26, NoMoreLies

    They really want to be a poor shitpile of a state.

    Pour yourself into the future.

    by Troubadour on Tue Feb 12, 2013 at 10:26:13 AM PST

  •  I wish this had received more national attention. (0+ / 0-)

    The Republicans in NC's legislature are determined to cut the state's deficit quickly, and the Democrats are in the minority here and cannot stop them. Republicans enjoy saying they are making bold moves to cut the deficit. This could easily happen in other states if there is no national spotlight on what has happened in NC.

    The Republican claims that this bill reduces taxes on businesses does not hold up to a reality check. Ironically, this same bill included an increase in NC unemployment taxes for businesses. The only tax savings may eventually come with a small potential future decrease in the annual Federal Unemployment tax that state businesses pay.

    The saddest thing to hear NC Republican lawmakers say, is that the cuts to benefits will push people to find jobs and help them become self supporting. This is pure ignorance because there are three applicants for every one open job in North Carolina. When I hear Republican legislators say things like this, I think of Marie Antoinette saying "let them eat cake". (I wonder if Marie Antoinette was actually a NC Republican....)

    One bright point for the state is that the NC Council of Churches stood tall and opposed the cuts to unemployment. There are some compassionate people in this state... just not enough in the State House.

  •  Short Sighted (1+ / 0-)
    Recommended by:

    I can not believe that the North Carolina legislature would even consider this. Do they have any idea that sequester very well may happen. An is right around the corner. As I have stated before, it will cost far more for increased police and security then unemployment insurance. People will not sit down and die, they will fight back anyway they can to survive. This is just human nature. I pray and hope that common sense will prevail and this legislation will be defeated.

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