Pa. May Deny Unemployment Benefits to Repay Fed Debt

Wednesday, 23 May 2012 12:12 PM

By Sandy Fitzgerald

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Pennsylvania is considering a bill that would deny benefits to an estimated 48,000 unemployed workers to help reduce a $3.87 billion debt owed to the federal government to help pay jobless claims, according to the Philadelphia Inquirer.
 
The measure would allow the state to float a bond to help prop up an unemployment fund that state officials say is “structurally insolvent.”
 
“This is akin to refinancing your house,” said Pennsylvania Secretary of Labor Julia Hearthway. “It’s the lowest interest rate we’re going to have for years to come.”
 
The bill now being considered in the Senate is expected to save the state about $276 million a year, beginning next January, by cutting about 10 percent of the 500,000 now receiving state unemployment benefits.
 
But critics say the plan aimed at putting the unemployment fund back in the black will actually hurt the most vulnerable – those out of work who rely on benefits now.
 
“It looks like we’re going to solve the problem by taking it out of the pockets of the unemployed,” John Dodds, director of the Philadelphia Unemployment Project, an advocacy group, told the Inquirer.
 
Other options for dealing with the problem have been raised, including raising the tax on employers that helps underwrite the fund and increasing the annual amount workers pay into the fund above the current figure or $37.
 
But the Inquirer reported that neither of those options appears to be “politically viable in the no-tax culture” of the current Republican-controlled state government.
 

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