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Debt Debate Could Impact State Benefits

Posted on Friday, July 29, 2011 11:15am

If U.S. lawmakers don’t raise the debt ceiling, it’s possible that California’s unemployment checks would stop going out. California relies heavily on federal money when it comes to unemployment. The U.S. government pays for a series of extensions to benefits.

Loree Levy with the State Employment Development Department says it’s unclear whether the extension would be cut off if there’s no debt ceiling deal. Additionally, Levy says the state’s own unemployment insurance trust fund is insolvent and relies on a federal loan to pay for regular state benefits, saying, “since that is a loan from the federal government to pay regular unemployment benefits, we could also be talking about those coming to an abrupt end, so we’re very concerned about that and are awaiting further interpretation from the department of labor.”

Levy says there are more than one million Californians currently receiving unemployment checks. She says while E-D-D waits for word from the federal government, the department is figuring out how to notify those people quickly if benefits are interrupted.

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