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The Associated Press May 18, 2011, 4:18PM ET

NC Impasse now impacts 42,000 jobless

Thousands of North Carolina residents have been added to the ranks of those no longer receiving unemployment benefits because of a political stalemate, the Employment Security Commission's deputy chairman said Wednesday.

About 42,000 people have lost extended benefits in the month-long standoff between Republican legislative leaders and Democratic Gov. Beverly Perdue, up from an initial estimate of 37,000 people who lost the chance to receive federal benefits for up to 99 weeks, said David Clegg, who oversees the agency's unemployment Insurance division.

About 2,100 people are running out of benefits each week, Clegg said, though not all would qualify for the extended payments because some may have lost their jobs due in part to something they did. The extended benefits pay an average of about $297 a week.

The U.S. Labor Department notified North Carolina officials in early April that the extended benefits program had to stop paying out after April 16 because the state's recent three-month average unemployment rate had improved from 2010 and 2009. South Carolina and 13 other states have passed legislation to revise their formulas and keep the extended benefits flowing.

Republicans, who this year took over control of the General Assembly for the first time in 141 years, linked changing the formula to a condition that Perdue accepted a 13 percent cut from her proposed spending levels.

Perdue called the linkage "extortion" and vetoed the combined measure hours after final action by GOP leaders on the day of the deadline. Republican leaders said they wanted to ease questions about continued state funding in case a budget deal isn't reached by the time the next fiscal year starts in July.

Democrats fumed that the benefits cut-off has been allowed to linger.

"It's a shameful situation," said House Minority Leader Joe Hackney, D-Orange.

Senate leader Phil Berger, R-Rockingham, said Wednesday there was no change in the status quo. Legislative leaders found nothing onerous about forcing Perdue to accept that the GOP-written budgets would spend only in line with existing tax revenues, without the sales tax increase that some Democrats seek.

The extended jobless benefits program of up to 20 weeks of compensation was created for about three dozen states including North Carolina as a way to lessen the pain for the long-term unemployed caught in the recession's massive job losses.

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