WASHINGTON (WWJ) – Among the biggest fears for millions of Americans is what will happen to their federal unemployment benefits in the event of a government shutdown. The latest word from the U.S. Department of Labor is federal unemployment benefits will continue… shutdown, or no shutdown.

Melanie Brown with the Michigan Unemployment Insurance Agency says she has been closely monitoring this issue all week as the shutdown deadline approaches. “People who are in one of the federal programs, either the emergency unemployment compensation program or the extended benefits program, they assure us that they do not anticipate any interruptions in those payments,” says Brown.

There’s been lots of speculation over whether benefits would continue, however, Brown says federal unemployment benefits, which average about $300-a-week for roughly 150,000 Michigan residents, will continue whether we have a shutdown or not.

As far as Social Security goes, WWJ spoke with Todd Spangler, Washington Correspondent for the Detroit Free Press, who says current beneficiaries won’t be affected at all.

“That money there, they’ll still be getting their checks. The real question is whether somebody whose putting in for Social Security now… In the last shut down, back in the mid-90’s, new claims for Social Security were affected, and we sort of expect to see the same thing this time,” he said.

Spangler said a government shut down would also temporarily lay off 30,000 federal workers in Michigan and slow down distribution of tax refund checks.

Another real risk should the government shutdown occur would be another credibility “hit” to the U.S. dollar as the global currency of choice – that’s according to Wayne State University Economics Professor Stephen Spurr. “We do have to do something about the deficit, if we do not we will be facing the possibility that other countries will not regard our currency as a safe reserve for them. I think it’s very important to avoid that outcome at all costs,” says Spurr.

Spurr says if the day ever came where the U.S. dollar was not the standard of choice globally, the value would fall leading to more expensive imports and higher interest rates on our national debt.

He describes what is going on right now between Democrats and Republicans in Washington as a “game of chicken” that has the chance to create some lasting damage. “At one point there was talk about bringing about a possible default of the U.S. government on its debt obligations, and I think if that happened it would be a real disaster. So, I think that the Republicans understand those things and so they’re not going to push it to the breaking point,” says Spurr.

Meanwhile, with Friday’s deadline to avoid a government shutdown rapidly approaching, U.S. Senator Debbie Stabenow of Michigan wants to make sure members of Congress and the President don’t receive a paycheck if the Fed ceases operating.

Stabenow and 20 of her Senate colleagues have formally requested a meeting with House Speaker John Boehner to immediately pass stand-alone legislation blocking legislative pay if a shutdown were to occur.

  1. A Michigan Resident says:

    Even the American government has been swamped by the Professional Administrator, whose job is the generation of conflict and mired discussion. The Service Economy is full of these guys who never made anything in their careers. This Government shut down is one more reason to insert more American engineers into the process. They get things done. They are trained to make things work and produce results. In a time when America needs to accelerate its industrial output, we get an Administrator’s Service Economy. American industry made this nation great. The American Administrator is dismantling that history.

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