Unemployment Insurance Hit by "Drastic" Budget Cuts

CHRISTINE OWENS, via Norman Eng, neng at nelp.org, @NelpNews
Owens is the executive director of the National Employment Law Project, which just released a report titled "Unraveling the Unemployment Insurance Lifeline." She said today: "It's disconcerting that these lawmakers would expend so much energy making cuts to state unemployment insurance programs when more people are out of work for longer than any other period on record. Rather than adopting responsible financing practices and doing the hard work of fostering job creation, far too many state lawmakers have taken the easy out of cutting workers' unemployment insurance benefits."

The NELP said today that starting in September states must begin paying back interest on federal loans used to fund unemployment insurance during the recession. In 2012, the federal government will raise taxes on employers in borrowing states, as required by law, until the loans are paid in full. Owens said: "Responsibility for the necessity of state borrowing falls squarely on the shoulders of state lawmakers and lobbyists who insisted on massive business tax breaks even when corporate coffers were flush and states' balance sheets were positive. At a time when U.S. corporations are stockpiling cash, it's outrageous that state lawmakers have the audacity to make jobless workers pay for decades of irresponsible business tax breaks that ultimately undermined state unemployment insurance finances. These latest legislative measures were ushered through at the behest of corporate lobbyists, behind closed doors and with no public debate. Sadly, workers will not realize the consequences of these drastic measures until unemployment benefits are no longer there when they need them, by which time it will be too late."