Unemployment Checks Could Be Cut Off

Checks heavily supported by federal funds could be another casuality in the debt ceiling battle.

Thursday, Jul 28, 2011  |  Updated 6:06 PM PDT
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Thousands of miles may not be enough to shield Californians from the debt debacle coming to a head in Washington, D.C. for weeks.

Federally funded unemployment checks could be cut off if no deal is reached by the Tuesday, Aug. 2 deadline, according to Loree Levy with the State Employment Development Department.

California relies heavily on federal funds to assist the state's out-of-work residents. 

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With the state's unemployment rate at 11.8 percent, that could mean a major hit, both to individuals and to the state's economy.

Levy told Capital Public Radio it's unclear if that money will still be there if legislators on the Hill do not raise the debt ceiling.

Because there is no precedent for the possible cutoff, Levy said that her department is "very concerned," especially since the state's own unemployment insurance fund is all but non-existent.

"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," she said.

More than a million Californians currently receive unemployment checks ranging from $40 to $450 a week.

Levy said her department is developing a plan to notify them if their benefits are interrupted while waiting for more information from the federal government.

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