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California unemployment fund nearly out of money
(Sacramento Bee, The (CA) Via Acquire Media NewsEdge) Jan. 26--For the second time in five years, the state Unemployment Insurance Trust Fund is set to go broke -- big time broke.
The fund that pays benefits of up to $450 a week to the jobless sank into the red for the first time in its 60-year history in 2004. California borrowed $214 million from the federal government to continue paying benefits.
With surging unemployment in California driving more people to its rolls, the fund now pays out up to $34 million a day in benefits to the state's unemployed.
This week -- possibly even by today -- the fund will run out of money, and then will have to rely on a $1.84 billion federal government loan to pay benefits through March.
Proposals to fix unemployment insurance -- a benefit whose history dates to the Great Depression of the 1930s -- have so far gained little traction. Yet experts argue that without a serious overhaul, California's fund is careening toward a $2.4 billion deficit this year and a $4.9 billion shortfall by 2010.
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