The federal budget cuts known as sequestration require states to trim federal benefits known as Emergency Unemployment Compensation by roughly 10 percent. But what would seem like a simple administrative procedure is apparently a huge burden for some antiquated state unemployment systems.
Rich Hobbie, director of the National Association of State Workforce Agencies, said in written testimony during a congressional hearing on Tuesday that workforce agencies are in close communication with the U.S. Department of Labor about sequestration and that 11 might drop the compensation to comply.
"Eleven states are exploring terminating the [Emergency Unemployment Compensation] agreement with USDOL as an implementation option," Hobbie said.
The association has previously hinted that some states might drop the benefits, but it declined to say which states. A spokesman did not immediately respond to requests for additional information on Tuesday.
Indiana announced in February that it would halt the benefits because of confusion over how to carry out the cut, then reversed its decision in a matter of hours when the U.S. Labor Department said it would have more time to figure out implementation.
Roughly 2 million Americans receive the benefits, which kick in when workers use up the initial six months of benefits funded by states. Thanks to cuts Congress passed last year, the benefits reach a dwindling share of the jobless: In March, 4.6 million Americans had been out of work for six months or longer.
Hobbie testified during a hearing on the implementation of an array of unemployment reforms Congress enacted early in 2012. Those reforms included allowing states to try out innovative training programs and to drug test some unemployment claimants.