Unemployment Programs In 40 States About To Go Broke

[Amerigo Vespucci]

Unemployment Programs In 40 States About To Go Broke

States' jobless funds are being drained in recession

By Peter Whoriskey
Washington Post Staff Writer
Tuesday, December 22, 2009

http://www.washingtonpost.com/wp-dyn/content/article/2009/12/21/AR2009122103269.html

The recession's jobless toll is draining unemployment-compensation funds so fast that according to federal projections, 40 state programs will go broke within two years and need $90 billion in loans to keep issuing the benefit checks.

The shortfalls are putting pressure on governments to either raise taxes or shrink the aid payments.

Debates over the state benefit programs have erupted in South Carolina, Nevada, Kansas, Vermont and Indiana. And the budget gaps are expected to spread and become more acute in the coming year, compelling legislators in many states to reconsider their operations.

Currently, 25 states have run out of unemployment money and have borrowed $24 billion from the federal government to cover the gaps. By 2011, according to Department of Labor estimates, 40 state funds will have been emptied by the jobless tsunami.

"There's immense pressure, and it's got to be faced," said Indiana state Rep. David Niezgodski (D), a sponsor of a bill that addressed the gaps in Indiana's unemployment program. "Our system was absolutely broke."

[dgibby]

1. This will not end well.

I see no way the economy will improve significantly at this rate.