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Sequester cuts jobless benefits

The long-term unemployed will see their federal unemployment checks cut by 10%. Meanwhile, some states have also slashed payments to the jobless.

By Karen Datko Mar 5, 2013 12:15PM

Image: Unemployment line up (© BananaStock/SuperStock)Most of us have gotten through the first few days of sequestration without ill effect. But one group will be feeling real pain from the $85 billion in federal budget cuts very soon -- the 2 million Americans who are getting federal unemployment benefits. Their checks will be cut about 10% at the end of March.


It's a real blow to struggling families.


Sherri Summit, who has one kid in college and a 10-year-old at home, has been unemployed for nine months. She gets $368 a week in federal unemployment benefits and is two months' behind on her mortgage payment, she told the Evansville Courier Press in Indiana. "Where do you cut back when you've already cut back? Do you lose your home?" she said.


Former steelworker Richard Crowe, interviewed by Marketplace, will lose 10% of the $764 unemployment check he gets every two weeks. He's been collecting unemployment for nine months. "It isn't enough to begin with, and then you're losing money on top of it. It ain't good," he said.


The National Employment Law Project says 2 million Americans currently receive federal unemployment benefits, which kick in after workers use up state benefits, which in most states is 26 weeks. The federal money can last an extra 47 weeks, depending on a state's jobless rate. 


That federal money has been lifeline for many folks. According to the National Employment Law Project (.pdf file), "Almost four out of 10 unemployed workers have been jobless for 27 weeks or more, while the average unemployed worker has been out of work for 35 weeks."


Up to 3.8 million jobless people could be impacted by the end of the federal fiscal year in September if sequestration isn't addressed by Congress. The average payment is $300 a week, so the average reduction would be about $30.

Since the amount of benefits varies state to state, how much money the jobless will lose depends on where they live. For example:

  • In Texas, 87,000 people will see their federal benefits drop by 10% at the end of March. "For the average recipient, who received $322 a week in benefits, the reduction in benefits represents about $32 a week . . . ," says the Houston Chronicle. "For someone earning the maximum weekly benefit of $440, the cut would be $44 a week."
  • In Alabama, about 16,000 will be affected. The maximum benefit there right now is $265, says The Associated Press.
  • In Oregon, about 28,000 people will see their benefits cut by 10.7% as of March 31, The Oregonian says.

The reduction comes on top of cutbacks in eight states -- Arkansas, Florida, Georgia, Illinois, Michigan, Missouri, South Carolina and, most recently, North Carolina -- where lawmakers decided that 26 weeks of state benefits was too generous. Fewer weeks of state benefits have caused a corresponding reduction in the number of weeks of federal benefits in seven of those states, says NELP.  (To see how many state and federal weeks of jobless benefits are currently available in your state, check out this article and map from the Center on Budget and Policy Priorities.)


The situation for the unemployed is most dire in North Carolina, which reduced its unemployment compensation last month, despite the state's whopping 9.2% jobless rate. Beginning in July, state benefits will run out in 12 to 20 months, depending on the unemployment rate, and the maximum benefit will be slashed from $535 to $350, says Reuters. Also, reports the Asheville Citizen-Times, there won't be any federal jobless benefits, period:

"Federal emergency jobless benefits also will stop July 1 because the state changed its benefit structure, which isn't allowed under the 'fiscal cliff' agreement last month. The U.S. Department of Labor said the decision by North Carolina to refuse the extra year of benefits after six months will affect 170,000 people and hold back $780 million in weekly benefits."

Erica Lewis of Dobson, N.C., told the Mount Airy News that she's been drawing benefits for 12 weeks and that her husband recently lost his job.

"We used to have the Internet, but we had to give up all of the extras when I lost my job because that is what my paycheck was going for. Now, we don't have the Internet, no cable, and the only way we got (to the Division of Employment Security office) today was because of my daughter, because we don't have money for gas anymore, now that he has lost his job, too."

More on MSN Money:

Mar 5, 2013 1:23PM

But we can afford to give Egypt $250,000,000?


Mar 5, 2013 1:03PM
There are a lot of long term unemployed that won't take a job until the handouts stop. So this is a good thing. We need more cuts just like this. If you don't like it blame drama queen obama for putting on his "the sky is falling" show with staged photo ops instead of working with republicans. He got his tax hike on well off folks so he could look like a Robin Hood hero to his misguided class envy voters. so now he needs to man up and work with others on smart and meaningful  budget and program cuts that include so called entitlement reforms. I swear he is a horrible president. He thinks he is slick but he is disingenuous and very predictable. One can easily see right through to his true intentions. He counted on so many of you being either uninformed,uneducated, jealous of the wealthy and combined with the over 99% of black voters who voted for him only because he is half black he could not lose. Bravo!!! Hope you all enjoy him......the rest of us can't wait until his time is up.
Mar 5, 2013 1:04PM
Much larger cuts in government spending are necessary. The biggest problem is mandatory spending programs that force tax payer dollars to be spent on too many unnecessary things. In many cases there are more important places those funds can be used. There is a prevailing practice in all branches of the government that goes, money that is budgeted for a specific thing has to be spent before the deadline otherwise that funding will be lost going forward. Meanwhile there are hard working people losing their jobs unnecessarily because the system our government uses to allocate resources is broken and nobody wants to fix it. Politicians have always fought for funding based on their own political agenda and not what is for the good of the people as a whole. We don't need bigger government and more taxes, we need a government that works efficiently and meets its obligations in a streamline fashion devoid of political cronyism. Loss of jobless benefits, airport security lines, cuts in vital services, all could be avoided and bigger cuts in spending are possible if our dysfunctional government changes it's inefficient business as usual culture.
Mar 5, 2013 1:30PM
Yeah, but they found $250,000.00 to send to Egypt. No problem.  And the States keep raising taxes-
Then they make you pay for "the arts", benefits for the immigrants including free healthcare while I pay $550.00 a month --we can keep sending aide all over including  to Africa while people, seniors, kids and families go hungry here.
The government no longer wants the seniors to collect SS, they really wish they would just die-if not, I am certain they are trying to cut a deal with the Dutch for that...then since they helped send all these jobs, our jobs overseas, they don't want us either if we can't live on minimum wage-- but they welcome every unemployed  immigrant who wants to come here while their countries won't take us, won't help us with our own disaster relief  and yet  we forgive their debts---Washington needs to be leveled. They helped create this problem and not they foist it on what is left of the middle class and seniors. Hungry, unemployed and some homeless.
Mar 5, 2013 12:58PM
well then, maybe if the president was to actually do something to help promote jobs here in the usa and stop regulating businesses to death and beyond they might be able to get jobs. however this administration has no clue what it takes to run a business and how bad the current situation is for the average business here in the usa.  
Mar 5, 2013 1:57PM
I feel bad that these people are going to suffer, it sucks but at the same time i work 40hours a week and make what these people on unemployment are recieving.
Mar 5, 2013 2:41PM

I hope they cut the welfare checks before cutting unemployeement for those who have worked and paid into the system.  Also congress needs to stop sending money to help other countries! 

Mar 5, 2013 1:59PM

It's OK....  with the savings Homeland Security was able to purchase






Makes you wonder why Obama would need all that, especially if we already have the military.    He seems to be creating his owner personal military force, kinda like a dictator..

Mar 5, 2013 2:27PM

Our Government of the people, by the people and for the people, and the first thing they do when asked to cut expenses, is to SCREW the people.

Mar 5, 2013 2:43PM

Betcha didn't know... See Democrats ARE the enlightened ones!!

The Tonopah Solar Company in Harry Reid's Nevada is getting a $737
million loan from Obama's DOE. The project will produce a 110
megawatt power system and employ 45 permanent workers.

That's costing us just $16 million per job.
One of the investment partners in this endeavor is Pacific Corporate Group (PCG). The PCG executive director is Ron Pelosi who is the brother to Nancy 's husband.


Mar 5, 2013 1:55PM

Nothing like the fevered pitch of the drug addict screaming about needing a fix bad during withdrawal. This government, the corporate oligarchs, and the monied elites are screaming like stuck pigs who are now shoving money cut from social programs into the Military Industrial Complex. We need more cuts not less. The sequester only cuts $85-Billion annually. That is nothing compared with the $85-Billion the FED pumps out every single month. We need a sequester that kills the FED. When cuts start equaling a true decreases in spending, debt and deficits, then things will start to look up.

Mar 5, 2013 2:17PM
And why does the department of homeland security need 2700 armored personnel carriers? That money could have been used to cover a big part of those cuts.
Mar 5, 2013 2:02PM
We are setting a record this year for taxes we will bring in but we have a president who spends money like water out of a faucet. I do feel sorry for people out of a job but they should all know if you lose your job it is unlikely you will get one with the same pay. That is why even in high school your business class will tell you should never spend more than 80% of your net pay. Just think how many people we could help out if Obama would just cut down on his vacations and trips on airforce 1. It cost 180,000 dollars a hour starting from when it is backed out of the hanger until it is returned.
Mar 5, 2013 2:14PM

Lets hear it for the great wisdom of the President and the Democrats and Republicans in Congress.  Do they force the cuts in the wasteful programs? Hell No!  Rather cut the unemployment benefits.  So not only did you loss your job, they now cut your benefits.  Then to top it all off they will tax your unemployment benefits when you do get a job. 

Give me back the tax dollars you keep taking off my paycheck.  We are better off keeping our guns and getting rid of the government.

Mar 5, 2013 2:43PM
when will the cuts kick in for congress pay??  they more than likely hide theirs in another bill they will pass an surprise they got a raise!
Mar 5, 2013 2:23PM
I run a business in Oregon, and I have not seen a increase in people looking for work. Most are making enough from the feds. they are not interested in taking a job that they have to work up the pay scale. Most of the people I have apply for a job want to start at the same wage they had at their last job and when you tell them their starting wage and it doesn't meet their expectations the never come back. Maybe a small cut in their unemployment will change their mindset.
Mar 5, 2013 2:38PM

These sequestration was the catalyst that got congress off it's blessed assurances . And so will the UE cut get possible job seekers off of theirs too. UE is not for you to sit behind a computer all day-It's to put gas into you car so you can go out and find a job, or keep you fed & healthy to interview for a job, or for you to be able to get appropriate clothing for a job.


The key here is TO GET  A JOB ! Not to support your every need for 99 weeks.

Mar 5, 2013 2:19PM
These posts are outrages.  I lost my job in January 2008 and still have not returned to work.  What is wrong is that I paid into the unemployment fund for more than 30 years and when I need help there is only sufficient funds to pay back about 400 dollars, on average, for about 60 (+/-) weeks.  Where has all of these funds gone?  It is time to reduce the pay for Governors, Congressmen and the Highly paid administrators in the government who contribute nothing and at the same time we need to take away their extraordinary perks and let them see how the middle class struggles to make ends meet.  It is the free loaders in Washington that is causing the problem and not the long term unemployed or the underemployed. We need new elected officials in washington who will put in the time and effort to work together to move the country out of this mess.  The best that we get now is a face on the evening news telling us the other person does not know what to do.  I have yet to see anyone in washington with a plan other taking away from the middle class.
Mar 5, 2013 3:09PM
We all know, Democrats and Republicans, that this is the presidents plan.  Inflict as much pain as possible, blame the Republicans.  I'm sorry for the folks that need this money...hard times ahead.  Sorry folks. 
Mar 5, 2013 4:37PM
I know people who get free housing, healthcare, food.  Why take a crappy job when you can get it all for free.  Have a baby out of wedlock that is paid for also.  Then free child care.  I worked three jobs at one time.  One at burger king.  It doesn't get any worse then that.  No welfare and unemployment checks to sit on my butt.  I  paid for my own college.  Keep giving out free everything, why find a job.  My sunday paper is full of jobs.  Just because you have a difficult childhood that isn't an excuse to fail.  A friend of mine came from a horrible family situation to get a very good job.  He got nothing for free.  Work!
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