Federal help for Calif. unemployment insurance less likely

Federal help for Calif. unemployment insurance less likely

SACRAMENTO, CA - California's insolvent unemployment insurance fund may have a tougher time getting federal help following the deal to cut spending while raising the debt ceiling.

The state owes the federal government nearly 49 billion and that could balloon to more than $11 billion by the end of the year. Surging unemployment due to the recession caused the state's unemployment insurance fund to run out of money in 2009.

Several plans are being debated in Washington to help California and other states in a similar position, but with spending cuts a huge focus in Washington right now, it becomes less likely that help will come. One of those proposals would have delayed payments on the debt owed by state unemployment insurance funds for two years.

"That means we're going to have to start owing the government interest that comes due in September and that could be more than $300 million dollars the state owes the federal government just in interest," said Employment Development Department spokeswoman Loree Levy.

http://www.news10.net/news/article/149670/2/Federal-help-for-Calif-unemployment-insurance-less-likely