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Feds threaten North Carolina after state cuts unemployment benefits

Chris Woodward   (OneNewsNow.com) Friday, July 12, 2013

A policy analyst says states are facing difficult budget tradeoffs, and unemployment benefits are no exception. 

One example is North Carolina, which had offered some of the most generous and expensive benefits in the nation with the fifth-worst jobless rate.

James Sherk, senior policy analyst in Labor Economics for The Heritage Foundation, explains that North Carolinians could collect as much as $28,000 annually in unemployment payments before the state cut back.

Sherk

According to Sherk, $350 a week would be closer to what most states provide. That comes out to $16,800 a year.

He says North Carolina has a $2.5 billion dollar loan from the federal government to pay unemployment benefits, but when the state cut its benefits to the national average, the Obama administration threatened to take it away.

“In the case of North Carolina they said, No, we're going to treat you guys differently. If you cut your benefits down to something that is more affordable for the state, we're going to withdraw all your eligibility,” Sherk recalls.

Sherk calls that "unfortunate" and says the federal government shouldn't try to force states to provide excessive benefits when it's bankrupting state budgets.


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