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N.C. Gov. Vetoes Controversial Unemployment Bill [UPDATE]

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Job seekers search for jobs online at an Employment Security Commission office in Charlotte, N.C. | AP

North Carolina Gov. Bev Perdue (D) has vetoed legislation that would have cut the state's budget while allowing 37,000 laid off workers in the state to receive their final 20 weeks of federal unemployment insurance benefits.

Republicans in the North Carolina General Assembly attached budget cuts to a bill maintaining the state's eligibility for the federal Extended Benefits program last week. Perdue issued her veto threat on Saturday, after tornadoes smashed houses and killed 22 people throughout the state.

In the aftermath of the unemployment showdown, Perdue and state Republicans lobbed unkind press releases at each other.

"The General Assembly has once again shown they are willing to play games with people's lives in holding hostage some 37,000 unemployed North Carolinians," a Perdue spokeswoman said in a Saturday statement. "But to sign the bill and suffer the extreme cuts proposed by Republicans would risk the future of this state and the lives of 9.5 million citizens."

North Carolina Republican Party Chairman Robin Hayes returned fire: "It is a shame that Governor Perdue would cut off the jobless benefits of 37,000 families to avoid cutting one cent from her big spending, big government budget proposal."

The GOP-crafted bill would cut spending in the governor's fiscal 2011-2012 budget by 13 percent. To do so, it would halt raises for public workers and require workers to contribute a larger portion of their salaries to their pension plans.

North Carolina is one of three states where the Extended Benefits program began phasing out on April 16. EB is fully funded by the federal government and does not affect state deficits. In states with high unemployment rates, it provides up to 20 weeks of benefits for layoff victims who exhaust 53 weeks of federal Emergency Unemployment Compensation and 26 weeks of state benefits without finding work.

States are eligible for the EB program if the local unemployment rate is at least 10 percent higher than it was in either of the two previous years. Even though unemployment remains high -- it's 9.7 percent in North Carolina -- it hasn't risen enough to meet that requirement. In December, Congress said states could change the "look back" period to cover the previous three years instead of just two, but several state legislatures have balked at the offer of additional aid for the jobless.

Republican lawmakers in Michigan and Missouri used the EB opportunity to pass an unprecedented reduction in state unemployment insurance.

The EB legislation in North Carolina moved under the radar of local and national advocates for unemployed workers.

"There was very little notice around this bill moving, and so there's a lot of concern there was an effort to play politics with the unemployed," said Alexandra Sirota, director of the North Carolina Justice Center, a local affiliate of the progressive Center on Budget and Policy Priorities, a Washington think tank. She added that she expected Democratic lawmakers to push a clean version of the EB fix later this week. The legislature is controlled by Republicans.

Spokespeople for Republican leaders in the General Assembly didn't respond to requests for comment from HuffPost.

North Carolina House Minority Leader Joe Hackney (D) said there wasn’t much the minority party could do to reauthorize the benefits without GOP help. He said he’s heard from constituents worried about the end of Extended Benefits. “I don’t think anybody’s greatly affected as of today, but within a week or two there will be a lot of people affected,” Hackney said. “I think it’s unfortunate and I think it’s inappropriate to attach something unrelated to the bill.”

Ron, a 61-year-old human resources manager who said he lost his job in mid-2009, told HuffPost federal unemployment benefits helped him and his wife "keep the lights on, keep food, keep a reasonable portion of gasoline in the car. It helps to meet the basic needs."

Ron, who lives in Research Triangle Park, asked his full name not be used because he's had some interviews recently and doesn't want potential employers to know he's struggling. He said he has a few more weeks before he's eligible for Extended Benefits. If those benefits disappear and he doesn't land a job by the end of the year, he said, he'll apply for early retirement benefits from the Social Security Administration.

"Without the unemployment benefits, we're going to be in some trouble," he said.

This story has been updated to include comment from the North Carolina House Minority Leader.

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