INDIANAPOLIS (AP/WANE) -- Update, Feb. 27, 10 p.m.: The Indiana Department of Workforce Development issued the following statement Wednesday evening that said they will not withhold some benefits for extended unemployment compensation:
In response to the State of Indiana's request for additional guidance, late this afternoon the U.S. Department of Labor confirmed that unemployment benefits will not be impacted by sequestration through the week ending March 9, and additional guidance will be forthcoming. As such, the Indiana Department of Workforce Development will proceed with full payment of extended unemployment compensation until further notice.
DWD Commissioner Scott Sanders said in a statement that Indiana officials will be provided more information Friday, Mar. 1 on the effect of sequestration and how it relates to unemployment benefits.
For now, benefits for the weeks ending Mar. 2 and Mar. 9 will not be effected by looming federal budget cuts, according to Gay Gilbert, Administrator of the Office of Unemployment Insurance of the U.S. Department of Labor. Gilbert responded to an inquiry by Indiana DWD officials about cuts.
This is an update to the previously published article below.
Indiana residents will lose some unemployment benefits immediately if automatic federal spending cuts take effect this week, state officials said.
The state Department of Workforce Development said it would temporarily cut off federal emergency unemployment benefits Saturday if the cuts are implemented. The benefits, which affect those who are unemployed for more than 26 weeks, would remain suspended until the state receives guidance from the federal government. Last week, 32,000 people collected federally extended unemployment benefits in Indiana, a department spokesman said.
The out-of-work are among Indiana residents who would be affected by the $85 billion in cuts that will run through September unless President Barack Obama and Congress act to stop them before Friday's deadline. Early childhood education programs, the military, domestic violence shelters and meal programs for the elderly also would be affected.
Many agencies say they are uncertain how the cuts will unfold and that they've gotten little to no guidance from the federal government.
Joe Frank, a spokesman for the Indiana Department of Workforce Development, said the state isn't sure how much the federal government would reduce unemployment benefits, so it is suspending payment to avoid inadvertently paying too much and having to collect the money back from the benefit receivers. The U.S. Department of Labor has agreed to speak with Workforce Development officials by phone on Friday, but it's unclear what effect that will have on the state's current plan for federal unemployment benefits.
"We've gotten no guidance from the federal government on how to handle this," Frank said. "If we pay folks ... more than we are supposed to, federal law requires that we get that money back."
He added that the state can retroactively pay benefits owed to the unemployed once it receives more information from the federal government on what to do.
Maurice Emsellem, co-director of policy for the National Employment Law Project, a worker advocacy group, contends that what Indiana is doing is illegal.
"The federal law is really clear. The states have an agreement to pay the benefits," Emsellem said Wednesday. "You can't delay paying a benefit. ... By definition, by suspending benefits, they are delaying the payment of benefits, which entirely violates federal law."
Sherri Summitt, a 48-year-old unemployed woman from Unionville, said she has had no time to prepare for a loss in benefits. She lost her job as a licensed nurse in May and has been receiving a federal extension on unemployment benefits since December. She has three sons, two of whom she continues to support financially.
"I'm a little panicked, to say the very least," Summitt said. "That would be two-thirds of my income gone."
Social services agencies in Indiana are also worried about how they'll handle potential funding cuts.
Some Head Start early childhood education programs could be forced to end the school year early, shut down classrooms or reduce the number of spots available next year for children in low-income families, said Diane Baker, executive director of Family Development Services, the provider of Head Start programs for Marion and Hamilton counties.
"Worst-case scenario for us is we would have to cut over 200 children," said Baker, who isn't sure whether the cuts would be effective immediately.
The impact could be broader statewide. A document released by the White House on Sunday says Head Start services would be eliminated for approximately 1,000 children in Indiana if cuts take effect.
Funding reductions would also affect Meals on Wheels programs that deliver food to seniors in their homes and serve hot meals at some locations throughout the state. The White House estimates Indiana would lose about $820,000
in funding for the meal programs.
"That might mean that we aren't able to start new people on the service," said Orion Bell, president of CICOA Aging and In-Home Solutions, which oversees government funds for programs in central Indiana. "We try typically to start a person on the program within three days of when they initially call. We might have to have a waiting list for the service."
Many low-income people ages 60 and older rely on the programs not just for a daily meal but also for social interaction, Bell said.
"For about half of them, the driver who delivers their meal is the only person they talk to some days," he said. "It's their socialization and connection to their community."
Domestic violence programs might also have to deny people services if their budgets are slashed. Laura Berry, executive director of the Indiana Coalition Against Domestic Violence, said the majority of the coalition's funding comes from the federal government.
The White House estimates that Indiana could lose up to $138,000 in funding for providing services to domestic violence victims, meaning 500 fewer people could be served.
Domestic violence programs and shelters in Indiana are already turning people away because they don't have room for them. If the cuts go into effect, even fewer people would have access to services, Berry said.
"It's very realistic that we're going to be turning away services to a higher percentage than we are currently turning away," she said. "We're deciding who's in the most danger, which isn't fair."
Indiana Gov. Mike Pence, who voted for the 2011 bill setting up the automatic cuts while he was in Congress, said Wednesday that reducing the federal deficit needs to be a top priority but that there are better ways to make cuts.
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