Almost half of the 850,000 Californians who collect unemployment could see a reduction in benefits under federal sequestration. That’s the automatic federal budget cuts that could take effect March 1st.

The California Employment Development Department says those who collect federal extension benefits stand to lose the most under sequestration.

Those benefits are for the long-term unemployed.

Loree Levy with the Department says they could see a 10-percent benefit reduction.

She says sequestration won't just hurt the unemployed.

LEVY: "Studies have shown that for every dollar paid in unemployment benefits there is at least another $1.60 up to $2.00 more in economic benefits to the local economy. So there stands to be millions of dollars lost in the local economies if sequestration hits in the unemployment insurance program."