Snyder signs cut in unemployment benefits

By Kathy Barks Hoffman

Associated Press

LANSING (AP) -- Gov. Rick Snyder on Monday made Michigan the first state in the country to lower the number of weeks jobless workers can get state benefits, a trend other cash-strapped states may follow as a way to avoid taxing businesses more for unemployment benefits.

Snyder said he signed the bill reducing state benefits from 26 to 20 weeks because it will allow people out of a job now to get up to 20 more weeks of help from a federal program for those who used up their state and most of their regular federal unemployment benefits. The change will allow them to extend unemployment benefits to 99 weeks.

Those last 20 weeks of federal benefits would have expired for 35,000 Michigan residents in early April and for 150,000 residents by the end of 2011 if Snyder hadn't signed the bill by Friday.

"Cutting them off so abruptly would have jeopardized the well-being of those who are trying hard to find work," Snyder said in a release after signing the bill in private.

But critics, including Michigan's entire Democratic congressional delegation, said the Republican governor should have vetoed the bill rather than sign cuts in state jobless benefits into law. Nearly every state has offered at least 26 weeks of benefits for the past half-century, and Michigan's unemployment rate has been one of the nation's highest for the past five years.

"Gov. Snyder's decision to sign this reckless measure cutting the lifeline for Michigan's unemployed will reverberate for years in Michigan," U.S. Rep. Sander Levin of Royal Oak said in a release. "Republicans hijacked a simple technical change to extend 100 percent federally funded benefits this year and gave Michigan the dubious distinction of becoming the only state in the union with 20 weeks of state unemployment insurance."

A letter urging Snyder to veto the bill was signed by Michigan's two U.S. senators, Carl Levin and Debbie Stabenow, as well as Democratic Reps. Hansen Clarke, John Conyers, John Dingell, Dale Kildee, Gary Peters and Sander Levin.

"Michigan would be the only state to have 20 weeks of state unemployment insurance and the first state to reduce benefits during a period of high unemployment. These are two distinctions we do not want for our state," they wrote in the letter. They noted that Michigan's action could cause federal benefits to be reduced by an additional 16 weeks in Michigan, possibly costing jobless workers 22 weeks of state and federal benefits.

Michigan added 71,000 jobs between February 2010 and last month, the first sustained job gain the state has seen in the past decade, and its unemployment rate has taken the biggest tumble of any state in the country over the past year, from 13.5 percent to 10.4 percent.

Still, finding a job isn't easy. Michigan last year ranked third-highest nationally in the percentage of unemployed workers who had been looking for a job for a year or more -- 36 percent out of 590,000 workers, according to the federal Bureau of Labor Statistics.

State Democratic lawmakers supported the extension of the federal benefits but voted against the overall plan because of the other changes to the state jobless benefits system.

Republicans who hold majorities in the House and Senate pushed the bills through last week, saying the plan makes sense given the poor financial shape of the state's unemployment insurance system. Michigan has had to ask for $3.9 billion in federal loans to cover the cost of unemployment benefits over the past two years.

Earlier this month, the Republican-controlled Florida House passed a bill that would cut the time that an unemployed worker could receive state benefits from 26 weeks to 20 weeks. Some Florida lawmakers have targeted state benefits cuts as a way to reduce an increase in unemployment taxes paid by businesses that otherwise would automatically go into effect as a result of Florida's continuing high unemployment rate.

Published: Wed, Mar 30, 2011