Unemployment, Federal Aid | featured news

Heavily indebted states could get immediate relief from the Obama administration under a plan to temporarily suspend interest payments they owe the federal government for borrowing money to cover the soaring cost of unemployment benefits.

With one in every eight workers unemployed and empty state coffers,
California is borrowing billions of dollars from the federal government
to pay unemployment insurance.

The state is borrowing $40 million a day from the federal government to provide assistance to jobless workers, but has resisted changing the formulas it uses to determine and fund those benefits.California's fund for paying unemployment insurance is broke.

In the coming months, as many as 1.5 million jobless Americans will exhaust their unemployment insurance benefits — for some a last bulwark against foreclosure and destitution.