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Associated Press

RALEIGH, NC (AP) — An unemployment insurance system overhaul for North Carolina has cleared its first hurdle early in the General Assembly as a House committee agreed to changes that would include cutting jobless benefits and raising employee taxes.

The House Finance Committee voted along party lines Thursday to recommend the Republican proposal formed with input from the business community. Business taxes have not kept up with unemployment claims. The state now owes the federal government $2.5 billion.

The bill would reduce maximum weekly benefits by one-third to $350 for the newly unemployed after July 1.

Bill supporters say the measure will accelerate debt repayment and remove an impediment to job creation.

Democrats say the debt solution is skewed against unemployed workers trying to pay bills.

(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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