The Washington Post’s Peter Whoriskey looks at the crisis of state unemployment benefit funds: the majority of states have run out of money and need emergency federal assistance. Whoriskey explains that while the crisis is due to the recession, the source of the problem is not just the economy but myopic state governments:

Unemployment benefits are funded by the payroll tax on employers that is collected at a rate that is supposed to keep the funds solvent. Firms that fire lots of people are supposed to pay higher rates. The federal government pays for administrative costs, and in a recession, it pays for the extension of unemployment benefits beyond 26 weeks. But over the years, the drive to minimize state taxes on employers has reduced the funds to unsustainable levels.

“The benefits haven’t grown — that’s not the problem,” said Richard Hobbie, director of the National Association of State Workforce Agencies.

The consequences of fiscal irresponsibility at the state level are immediate: 46 states must balance their budgets, meaning that the best hope for the unemployed to collect benefits is a continued stream of “emergency” federal assistance.

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