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."