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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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