States' Unemployment Trusts Going Downhill

Many states appear to agree. New Jersey's trust, despite a $260 million emergency loan from Washington five months ago, is about to borrow money again with just four months of money for benefits left.

"The scope of this may well have to be met at a federal level," says Kevin Smith, a spokesman for the New Jersey Department of Labor.

New Jersey, like Indiana, made a decision to deplete its fund in the 1990s, diverting $4.7 billion from it to other uses. New Jersey Gov. Jon Corzine, who says he put a stop to this practice when he took office in 2006, told the Star Ledger recently: "We have to pay that piper... either by putting money into that system from some other place or we're going to have get help from the federal government."