Sequestration, the automatic spending cuts that loom at the end of the month, will have widespread and devastating effects on the American economy, reducing growth by 0.6 percent and costing it 700,000 jobs, according to independent analysts. But it will also have major effects on programs that Americans depend on, particularly as the modest economic recovery continues.
Among the programs that will face cuts is the federal unemployment insurance program. While the part of the program that benefits the unemployed by providing grants to states is exempt from the cuts, the extended benefits signed into law at the start of the Great Recession are not. Extended benefits provide aid to workers who have been unemployed longer than 26 weeks, when most states end their programs. The budget cuts will reduce those benefits, which average roughly $300 a week for the program’s 3.8 million recipients. CNN reports:
The forced spending cuts scheduled to take effect next month trim the program’s funding. Recipients of those payments could lose an average of more than $400 in benefits each through the end of the federal fiscal year, according to the Department of Labor.
America’s unemployment insurance program is already stingy compared to those used by other Western industrialized nations, and it is rapidly becoming even stingier. Seven states have passed laws reducing access to unemployment benefits, and those laws carry the side-effect of ending access to federal unemployment compensation as well. In North Carolina, where the most radical change was made, benefits were cut by more than $200 a week, and the state’s jobless will lose access to $780 million in federal funds.
Democrats have offered plans to replace the sequester with a combination of spending cuts and revenue increases that protect the most vulnerable Americans, including those who have been unemployed for months. Republicans, however, have refused to negotiate on any package that is not made up solely of spending cuts, even though spending cuts have made up the majority of deficit reduction efforts so far.