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Economic Analyst: Budget Austerity Hurting Kentucky

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Tuesday, November 19, 2013   

BEREA, Ky. - The elimination of long-term unemployment benefits and the shrinking of housing assistance are prime examples of "harmful" federal budget cuts, according to an economic policy analyst in Kentucky, Anna Baumann of the Kentucky Center for Economic Policy. She declared that sequestration and federal austerity are "a blow" to thousands of Kentuckians.

"Times are still really hard for Kentuckians. It's a weak economy and a bad job market," she said. "And, low- and middle-class families are still not benefiting from growth in the economy, so when the federal government cuts these programs that are supporting those families it's a significant hardship."

Baumann said one of the biggest effects will be felt in late December with the cut-off of long-term unemployment benefits, which were created when the recession hit in 2008. The benefits now stretch up to 63 weeks. Baumann said that unless Congress reauthorizes Emergency Unemployment Compensation, nearly 36,000 Kentuckians would lose crucial support because their benefits would end at 26 weeks.

"Which, by the way, is about ten weeks shorter than the average length of unemployment in the nation today," she said. "It'll be a real hardship for people who are still looking for jobs in the weak job market."

The White House and Congressional Democrats have asked for an extension of the long-term benefits.

On another problem coming up, Baumann said a shrinking of the Housing Choice Voucher program will mean up to 4,000 fewer Kentucky families will receive rental assistance by the end of next year.

"That's potentially a 13 percent drop in the number of households receiving support in Kentucky," she pointed out.

Sequestration reduced the housing voucher program by $938 million this year, and flatlines the funding for the coming year, according to Baumann.




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