Unemployment, social security impacted by debt debate


The state's Employment Development Department is racing to put together letters to 1.2 million Californians receiving unemployment checks, notifying them their money may stop coming if the debt crisis isn't resolved in Washington, D.C. by Tuesday.

Around $320 million in benefits would abruptly stop because the program has been running on federal loans since January 2009.

"We don't have a reserve in the Unemployment Insurance Trust Fund," said Loree Levy with EDD. "It's about $8.5 billion in the hole right now. We don't have that kind of backing to pay those payments right now."

Robert Guerrero could be hit with a double whammy as someone who collects Social Security because of his age and unemployment benefits after losing his part-time job. It's possible Guerrero won't get either benefits as the feds will have to prioritize what gets paid.

"I might end up in a soup line, like they did in the Depression days," Guerrero said. "I don't know, I just know it's going to be bad."

Aside from unemployment checks, public schools are worried they won't' be able to provide the federally-funded free lunches anymore. Sometimes, it's the only hot meal low-income children receive.

The 18-cents of federal gas tax that goes to highway and other transportation projects would be put on hold in California, jeopardizing thousands of jobs.

"We've been put through some scary times in California," said California state senator Darrell Steinberg. "As you know, in 2009, we were very much on the edge with a $42 billion deficit. We got it done. They've got to get it done in Washington, D.C."

But the clock is ticking, and many lives are on the line.

"The politicians aren't even thinking about that, or don't care," Guerrero said. "They're saying they care about the public, but they don't."

The California state treasurer took out a $5 billion loan earlier this year in anticipation of the problems in Washington, D.C., but the unemployment agency doesn't think it can tap into that as the state has its own bills to pay.

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