New York State is the biggest loser if the Senate fails to renew unemployment benefits soon.

The Labor Department projects that 54,300 claimants in the empire state will lose their coverage if Congress fails to act on extending jobless benefits by Mar. 13.

Sen. Jim Bunning (R-Ky.) is demanding offsets for the $10 billion package that extends benefits before he removes his procedural roadblock from the bill. Roughly 4,300 unemployed workers in Bunning’s state are scheduled to lose coverage if the Senator does not release the bill.

If Emergency Unemployment Compensation and full federal funding for the Extended Benefit program are not extended, 400,000 Americans will lose unemployment benefits during the first weeks in March, according to the Labor Department.

Unemployment benefits lapsed over the weekend because Congress failed to extend the program. Senators say it is only a matter of time before Bunning removes his objection or the chamber passes a larger jobs package that includes an extension to unemployment relief, as well as a resuscitation for several tax breaks aimed at businesses and individuals.

However, retroactively enacting jobless relief will cause compliance headaches, according to the Labor Department.

“Even if Congress acts down the road to retroactively reinstate UI benefits, a gap in the program forces administrative burdens onto states, which may cause significant delays in getting checks to unemployed individuals,” it stated in prepared remarks.

Last week, the House unanimously passed a bill to temporarily extend crucial benefits -- including unemployment insurance. Senate leaders have repeatedly tried to pass this legislation only to be blocked by Bunning. The upper chamber has now taken up a larger jobs package, which extends unemployment benefits through 2010, with an eye on passing it by Friday.