Sequester to hit long-term unemployment benefits

An instructor leads a class for job seekers on unemployment insurance benefits, disabilities insurance and veteran information in Arcadia, California.

If the massive budget cuts known as "sequestration" come to pass, federal workers aren’t the only ones who will get a pay cut. Some of the hardest hit will be those who can afford it least -- the long-term unemployed.

After state unemployment insurance benefits run out, usually after 26 weeks, the federal benefits kick in. Those generally last for an additional 37 weeks, paid for with federal money.

Under sequestration, that extension would get a serious haircut.

“That’s going to translate into an 11 percent reduction in benefits,” says Maurice Emsellem, policy co-director at the National Employment Law Project. “It’s going to have a devastating impact on about two million unemployed workers who are receiving federally-funded benefits.”

Over the course of the fiscal year, Emsellem says a total of four million workers could be impacted. And the cuts will also reduce the funds that pay state employees to administer the program.

Sherri Summitt of Unionville, Indiana, relies on long-term unemployment benefits. She says her state administrators are under enough pressure already.

“Any time you call, you get no answers. You speak to people with no experience,” says Summitt.

It could have been worse.Until yesterday, Indiana threatened to suspend the federal program altogether. Now it plans to pay the long-term unemployment benefits at least through March 9th.

About the author

Jeff Tyler is a reporter for Marketplace’s Los Angeles bureau, where he reports on issues related to immigration and Latin America.

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