Sequester Cuts Long-Term Unemployed Benefits

  • July 02, 2013
  • By Jake Grovum (2)

Demonstrators protest cuts to unemployment benefits at the North Carolina General Assembly Monday. The rally highlighted the first day federal jobless benefits that were cut off for 70,000 people. (AP)

The automatic federal budget cuts known as sequestration have cut as much as $139 from a weekly benefits payment the long-term unemployed receive in some states, slashing a safety net program that provides support to hundreds of thousands of Americans.

The across-the-board cuts have reduced the maximum benefit paid under the federally funded Emergency Unemployment Compensation program by an average of $62, according to new data released by the National Employment Law Project, which advocates for workers, the jobless and the safety net in general.

The average maximum weekly benefit available nationwide to workers on the program is $414, meaning the automatic cuts amount to about a 15 percent reduction for those on the program, which covers workers who have been unemployed for six months or longer. As of June, 4.4 million Americans — or about 37.3 percent of the unemployed — were out of work for 27 weeks or longer, according to federal data.

The reductions vary by state, in part based on each state's unemployment rate, how much the unemployed qualify for and how quickly the state enacted the cuts. As Stateline previously reported, the longer a state took to enact the cuts, the steeper the reductions to benefits, because they would be packed into a shorter timeframe before the federal fiscal year ends this fall.

For example, Tennessee implemented the reductions on March 31, which led to a $29 — or about 11 percent — cut in the maximum benefit. New Jersey and Maryland enacted them on June 30, forcing a 22 percent cut. For New Jersey, that meant $139 less in the maximum weekly benefit of $624. In Maryland, a maximum benefit of $430 fell by $95.

Louisiana and Nevada, the two states that have yet to implement the reductions at all, face even steeper reductions when, or if, they eventually do so.

In North Carolina, the state opted out of the emergency unemployment program altogether rather than cutting the benefits, prompting widespread protests for a move that ended a program covering nearly 85,000 people, according to the NELP figures.

States have blamed delaying the cuts on bureaucratic difficulties, recent cuts in administrative spending and uncertainly from the federal government.  Advocates for the unemployed, on the other hand, have accused states of dragging their feet in the hope that the automatic federal cuts would eventually be reversed. There's been little talk of such a solution on Capitol Hill as the sequester has taken effect.