Sequester Would Chop Long-Term Unemployment Insurance

How The Sequester Would Hurt The Unemployed

WASHINGTON -- If the automatic spending cuts known as sequestration take effect as expected at the beginning of March, long-term unemployed Americans receiving federal unemployment insurance will see their weekly benefit checks reduced by 9.4 percent.

"Affected long-term unemployed individuals would lose an average of more than $400 in benefits that they and their families count on while they search for another job," the White House said recently on its website.

"Smaller unemployment checks will also have a negative impact on the economy as a whole," the White House said. "Economists have estimated that every dollar in unemployment benefits generates $2 in economic activity."

More than two million unemployed Americans currently receive federal "Emergency Unemployment Compensation," which kicks in for jobless workers who use up the standard six months of state-funded benefits before finding new jobs (some states, such as Florida and Georgia, offer fewer initial weeks of aid). State benefits will not be affected by the cuts. The average weekly amount is $300.

The National Association of State Workforce Agencies said in a bulletin to states last week that the U.S. Labor Department had notified them that they would have to implement the changes starting March 3 if Congress fails to act. A host of other department functions will also be affected, according to a Feb. 1 letter from acting Labor Secretary Seth Harris to Congress.

The smaller federal unemployment checks are just one of many ways the sequester will hurt American families and the broader economy, according to the Obama administration. After March 1, low-income seniors will receive 4 million fewer meals from federally-assisted charities. More than half a million women and children will be dropped from a nutrition program. Roughly 125,000 families will see their rental assistance threatened, and more than 100,000 formerly homeless Americans may be tossed out on the streets.

Those cuts represent only a small part of the sequester, which will chop $85 billion from the federal budget this year by reducing defense spending by 7.3 percent and non-defense spending by 5.1 percent. The Congressional Budget Offices estimates it could lead to the loss of 750,000 jobs in 2013 alone.

Over 10 years, the cuts amount to more than $1 trillion. Republicans in Congress agree with Democrats that the policy is terrible, but disagree over how to replace it. Both sides seem seemed resigned to the prospect of the its taking effect.

CORRECTION: An earlier version of this story incorrectly stated that low-income seniors will receive 400 million fewer meals after after sequestration kicks in. The correct number is 4 million.

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