North Carolinians may be on the outside for a second time when it comes to the latest proposed extension of federal unemployment insurance benefits.
Legislation has been introduced in Congress that would provide up to 47 weeks of extended federal benefits during 2014 at an estimated $25 billion cost.
Senate Republicans blocked the bill from consideration Tuesday, and it was not included in the federal budget compromise reached Tuesday.
If Congress doesn’t approve extending the benefits, an estimated 1.3 million Americans would be cut off after Dec. 28. An additional 1.9 million are projected to lose those benefits during the first half of 2014.
The benefits were cut off for about a week in late 2012 before Congress passed a one-year extension Jan. 3.
The potential expiration doesn’t affect North Carolinians because they were made ineligible to receive those benefits, as of July 1, as a result of a law passed in February by the Republican-controlled General Assembly. The law reduced the maximum number of state UI benefit weeks from 26 to 20 and maximum weekly benefit from $535 to $350.
States that made changes to their UI benefits without congressional approval were disqualified from receiving benefits. North Carolina was alone in applying the benefit-reduction strategy within a federal extended benefits cycle. According to the U.S. Labor Department, the decision cost North Carolina an estimated $780 million in UI benefits for the second half of 2013.
State legislative leaders, led by Senate President Pro Tem Phil Berger, R-Rockingham, and House Speaker Thom Tillis, R-Mecklenburg, touted the benefit reductions. They said they were trying to bring the N.C. jobless benefits in line with the maximum provided in eight Southeastern states.
Gov. Pat McCrory, in signing the bill into law, said “this bipartisan solution will protect our small businesses from continued over-taxation, ensure our citizens’ unemployment safety net is secure and financially sound for future generations, and help provide an economic climate that allows job creators to start hiring again.”
U.S. Sen. Kay Hagan, D-N.C., is requesting that Senate leaders include a provision reinstating North Carolina’s eligibility for the benefits even as the law remains in place.
“North Carolina’s unemployment rate (8 percent in October) remains among the highest in the country, and I want to do everything possible to remedy the damaging impact of the irresponsible law passed by the General Assembly,” Hagan said in a statement Wednesday.
“As unemployed North Carolinians try to get back on their feet, they should be able to rely on the same safety net as residents of other states, to which their federal tax dollars also contribute, and should not be disadvantaged by the reckless actions of the state legislature’s leadership.”
U.S. Sen. Richard Burr, R-N.C., and U.S. Rep. Virginia Foxx, R-5th, could not be reached for comment.
John Dinan, a political science professor at Wake Forest University, said the best-case scenario for the continuation of the federal extended benefits would have been within the budget compromise.
“The decision not to include it in the budget deal does not in any way doom its passage, and it will likely come up again,” Dinan said.
Dinan said it will be interesting to see if Hagan is successful in inserting the North Carolina eligibility provision.
“Sen. Hagan has taken some heat this year from Republican state legislators, who charged that she could have done more in the U.S. Senate a year ago to ensure that North Carolina would not suffer a penalty if it changed its own policy,” Dinan said.
Republican legislative leaders first proposed reducing state UI benefits in November 2012 as part of an attempt to reduce the state’s then-$2.2 billion debt to the federal labor agency. There would have been no conflict with the legislators’ plan if Congress had opted against the extension.
However, when extending the federal benefits began to gain bipartisan support in Congress, the legislative leaders asked in December 2012 that North Carolina’s congressional delegation secure a grandfathering of the state’s extended UI benefits participation even before they submitted a bill to reduce state benefits.
Shelly Carver, press secretary for Berger, singled out Hagan on Wednesday for “dropping the ball” on the grandfather request.
“If she had done what the General Assembly called on her to do more than a year ago, North Carolinians would be eligible for extended benefits today,” Carver said.
Dinan said that since Hagan is likely to face a competitive re-election bid in 2014, “Democratic Senate leaders would presumably have an incentive to help her out by including such a provision in the bill.”
“It would be a way of enabling her to take credit for winning benefits for the state this time around.”
In an editorial posted by the Wall Street Journal on Monday, it cited North Carolina as among “some smart states that have begun to resist Uncle Sam’s not-so-free unemployment benefits and loans.”
“North Carolina, for example, was criticized as heartless for scaling back benefits earlier this year. But by doing so Raleigh avoided a payroll tax hike.
“Maybe it’s time to consider whether the big expansion of unemployment insurance has increased joblessness.”
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