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Georgia owes the Federal Unemployment Account about $620 million in loans taken out to pay unemployment benefits during the economic downturn. Under current regulations, states will be required to repay these federal loans, plus 4% interest. With double-digit unemployment figures, expectations are that Georgia borrowing will accelerate through the first quarter of this year. Labor Commissioner Mark Butler predicted it could reach $820 million in April. Georgia has the 16th highest loan balance nationally and the fifth highest among southern states behind North Carolina, Florida, South Carolina and Kentucky.

Where will the money come from to repay this debt? Higher unemployment taxes? Fewer unemployment benefits? Cuts to social services? An amount of this magnitude combined with Georgia’s existing and significant revenue burden would most likely affect children in struggling families.

President Obama is proposing to give states a two-year delay before automatic unemployment tax increases would hit employers, and before states would have to start paying interest on the loans. Perhaps by then, more people will be working and more families will be functioning at an economically stable level.

Learn more about the President’s Proposal by clicking here.

Today, Legislative Day 3, was what many consider the “first work day” for state lawmakers. No special ceremonies or speeches; no snow or ice. Overall, Georgia House and Senate committees are just getting warmed up, having organizational meetings and starting to examine agency budgets in a little more detail than perhaps they did last week during the FY11/FY12 budget hearings. That said, I think today is an opportune time to discuss a sizeable federal issue which cold affect kids right here at home: Federal budget proposals.

This week, Congressmen and women will vote on a resolution (H. Res 38) reducing federal spending to 2008 levels. This approach exempts defense spending. On the other hand, education, health, nutrition, and child welfare services would sustain significant reductions. For example, in this proposal, dollars going to children in special education grants would be cut by 53 percent. Head Start would be cut by 27 percent. Adoption incentives would be slashed by 89 percent. Yet, discussion on how to raise revenues has been surprisingly absent.

Another proposal by the Republican Study Committee would have Congress reduce spending to 2006 spending levels. This amounts to a $2.5 trillion cut over 10 years. It would even rescind any remaining stimulus money, as well as the bump in Medicaid support passed just last summer.

We believe that children are important to all of Georgia’s lawmakers. That said, if one of these resolutions were to pass, how would states like Georgia make up the difference in lost federal dollars?

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