State lawmakers met Tuesday to discuss drastic cuts in unemployment benefits.
During the meeting, a Legislative committee gave an initial green light to a proposal that would slash maximum weekly benefit checks from $535 to $350 and limiting benefit periods from 26 weeks to a sliding scale between 12 and 20 weeks.
Officials have said it's in order to pay off a loan from the federal government. Back in 2009, the state borrowed $1.5 billion to pay unemployment benefits.
The interest payments on the loan has run into the hundreds of millions.
The plan under consideration in the Legislature would also work to insure the long-term solvency of the state's unemployment benefits system.
The proposal also includes a plan to make local governments and nonprofit groups pay 1 percent of total payroll for 18 months to be held by the state against their future employee unemployment claims.
Under the current system, local governments are billed at the end of the year for any unemployment claims.
While lawmakers say something must be done to pay back the enormous federal loan, critics have said now is not the time to cut benefits struggling North Carolina families.
"If we reduce the maximum benefit from $535 to to $350 a week, there are many people who won't be able to live and pay their expenses, provide for their families, buy gas for the car to go look for a job," Sen. Floyd McKissick said.
Despite signs the economy is slowly bouncing back nationwide, North Carolina's unemployment rate still sits stubbornly at just over 9 percent. Nationally, it's 7.8 percent.
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