Via Politico: Jindal to refuse some stimulus money
Louisiana Gov. Bobby Jindal announced Friday that he will decline stimulus money specifically targeted at expanding state unemployment insurance coverage, becoming the first state executive to officially refuse any part of the federal government’s payout to states.In a statement, Jindal, who is slated to give the Republican response to President Barack Obama’s message to Congress on Tuesday, expressed concern that expanding unemployment insurance coverage would lead to increased unemployment insurance taxes later on.
“The federal money in this bill will run out in less than three years for this benefit and our businesses would then be stuck paying the bill,” Jindal said. “We must be careful and thoughtful as we examine all the strings attached to the funding in this package. We cannot grow government in an unsustainable way.”
This follows on from a story I noted earlier in the week.
Mississippi’s Haley Barbour is likely to take a similar stand:
“Subject to learning more, my position is that Mississippi won’t accept funds that require us to have a tax increase later, because [they would force] us to change our rules for qualifying for unemployment compensation,” he said.
Marc Ambinder has the text of the statement from Jindal’s office on the subject.
Several thoughts come to mind.
1. This is motivated by electoral politics as much as anything, and the target audiences aren’t the electorates in the states in question, but rather the GOP primary voters. Jindal very much seems to be thinking in these terms, and there has been speculation that Barbour has similar interests. The GOP bench is pretty thin at the moment, and Jindal seems (at the moment) to be the closest thing to a potential star on that bench. This kind of move will please the hardcore of the party. The fact that these moves might have the effect of damaging the governors in question electorally in their own states suggest that they are looking to other pastures.
Possible indications that this move will play well with the aforementioned primary voters, see: Hot Air, Dan Riehl and QandO.
In terms of 2012, this likely smart politics for Jindal, at least vis-a-vis key primary constituencies.
2. Like I noted in the post linked above, it is unclear to me that the governor of a given state has the authority to unilaterally refuse the monies in question. Surely the state legislature would be the responsible party for fiscal matters, yes? Still, I may be wrong.
3. If, in fact, the unemployment funds in question convert from federally funded to unfunded mandates in three years, that is a problem and runs counter to the notion that this is an immediate stimulus provision. In my mind (granted, not an authoritative sources in the matter, to be sure), an emergency stimulus bill like this would sunset after a specific span of time, as the very notion of such a bill is that it ought to be a temporary boost to an otherwise ailing economy. Of course, I am predisposed to the idea of sunset provisions in general, and especially in massive emergency bills like the stimulus package and things like the Patriot Act. It would seem to me that if a bill is rammed through the Congress during a time of crisis (real or perceived) to the degree that it can’t possibly have been adequate read and analyzed by those voting on the bill, then the responsible thing to do is require that the provisions of the bill have to be renewed at a set date in the future to help ameliorate the likely (and myriad) unintended consequences that the measure(s) will not doubt create.
However, as noted below, it may well be that LA could sunset this provision itself, taking away the basis for Jindal’s argument and underscoring that what this is almost certainly all about is 2012.
4. Even having said all of that, one has to wonder how any state, especially relatively poor ones like Mississippi and Louisiana, can afford to refuse large chunks of money at this point in time.
More details from the Times-Picayune: Jindal rejects $98 million in stimulus spending. The story has more details about the various monies in questions and what Jindal is, and is not, rejecting. The story also suggests, by way of Senator Landrieu (D-LA), that Jiundal’s interpretation of the long-term effects of the provision are not as Jindal suggests:
A senior aide to Landrieu agreed that the state would have to change the law to take advantage of the windfall but said the change would not have to be permanent. Instead, the Legislature could write the new law with a “sunset provision” so it expires when the federal stimulus dollars run out.The aide, who is not authorized to speak publicly on Landrieu’s behalf, said states are under no obligation to accept the expanded unemployment benefits and that they were designed for states such as Michigan where joblessness has been particularly acute.
Jindal has agreed to increase unemployment benefits, but not (as I understand it) as much, or as broadly, as the provision under dispute would require.
Politically, the following also makes the overall calculation easier for Jindal at this time (also from the Times-Picayune):
Louisiana’s 5.5 percent unemployment rate in December was well below the national rate of 7.6 percent. The state was one of only three that added jobs in December, along with Florida and Vermont.
February 21st, 2009 at 11:36 am
[...] PoliBlog: A Rough Draft of my Thoughts » Jindal to Refuse Unemployment Targeted Stimulus Funds [...]
February 23rd, 2009 at 12:45 am
I recently read that the stimulus bill requires each state’s governor to officially accept or reject the funding, and if rejected the legislature is then able to essentially override the governor.
February 24th, 2009 at 11:28 am
There is no single national standard for unemployment insurance. Each state sets its own criteria and qualifiers. Per today’s NYTimes editorial column, 19 states will need make no changes as they already fully comply with all the requirements of the stimulus bill (mostly northern states).
I haven’t found anything that exactly explains what is changing in this. I work with a guy who is a big Wall St Journal Editorial page/Rush Limbaugh fan, who insists the change involves mandating that people who quit (as opposed to being fired) would now qualify for unemployment, but I don’t know that this is true. The NYTimes editorial implies the change relates to minimum-wage workers, who (it doesn’t explain how or why) are often non-qualifying for unemployment for some reason.
Seems to me, even if the reason is as my friend describes, why does unemployment insurance only kick in if you’re fired, and not if you quit your job?
And Max is correct – I do know the bill mandates that a state governor must submit a formal request for stimulus for a state to obtain any. However, if also says if the governor fails to request it, then the state legislature can (via majority vote) request it in his/her stead (this is the complaining some Republicans have been making about how the bill “forces” governors to accept stimulus…of course, it doesn’t).
February 26th, 2009 at 4:56 pm
While very much in favor of some of the stimulus package, I am a retired unemployment worker, and I think this part if the stimulus bill is VERY flawed, to the point that I would not mind if my state refuses it. It is a terrible thing that there were a series of changes to unemployment law that were required in order to get this money. It goes against the whole nature of the program. And once these changes are put into the system, it would be very hard to remove them and go back.
Unemployment is paid for by the employers and drawn by employees only if they have been let go through NO FAULT OF THEIR OWN. In order to qualify, the worker must have worked for a certain number of quarters and have made a certain amount of money. These amounts as well as the weekly benefit amounts vary from state to state, but if you have not been in the labor force, or have been an independent contractor, you do not qualify for benefits.In other words, to qualify for benefits, you have to be laid off because of the business closing or losing work, or being fired UNJUSTLY, or for quitting their job for a very good work related reason (such as your paycheck bouncing, the employer harrassing you,etc.) So you can’t really say people who are fired get to draw and people who quit do not. It totally depends on the circumstances. This is pretty much the federal policy that is carried through by all the states. This is a fair and defensible program. It is not welfare, not based on how badly you need it, how poor you are, how low your income is, only on quarters worked, and reason for leaving the job. It is for a set number of weeks only, and is not designed to replace work, only to provide a little income for people while they are looking for other work. The stimulus program requires states to alter their programs in several ways, providing several different choices, of which they must choose some. One change is to allow part time workers to draw, even if they are only looking for part time work. One is to add dependents allowances to benefits if they are not already provided in your state. One is to completely change the quarter system and give unemployment to people who have worked a lot less than is now required. This will require a major revamping of the state’s computer systems and is a change that would by necessity stay in place long after the stimulus money is sent and spent. It will also raise the employers’ taxes greatly. People may be allowed to receive unemployment benefits as long as they are in training. This requires a whole new set of rules defining training, and setting limits on how much and how long. Do we allow six years of training/unemployment benefits if the person is making very slow progress? This would require heaps of monitoring from an already stressed state workforce or it would quickly become ridiculous.
But the worst of the worst of the options is the idea that would require unemployment to be granted to people who quit their job if they have health problems, or a sick family member. This means that for the first time in the whole state and federal system, people can receive unemployment who are not able and available for work. This is drifting over into “welfare.” There is also a ridiculous proposition that people could receive benefits if they had to quit their job due to “domestic violence.” Huh? Explain how in the heck this could be monitored or determined fairly. And most of all, on a program that taxes employers, how could this possibly be the fault of the employer? This idea has been floating around for years, and has been shot down by people who work with unemployment over and over. If they want to give money to people who are too sick to work or who have domestic issues, they should funnel it through the Food Stamp and Aid for Children aspect of state programs.
In my years working in the system, I always told people that unemployment insurance was not welfare, and they should not have any pride issues with taking it when they became eligible. This drifting into the world of giveaways is changing that. It is bad. Rush and his jerks are wrong, unemployment is not a give-away, it is a very good program. But somehow, I feel like the president got some very bad advice on this particular aspect of the stimulus package. The trust funds of many if not most of the states are shriveling. Why not boost the trust funds without attaching all these malevolent strings? Why try to legislate and change programs that have worked successfully for years and that are administered fairly and competently at a time when we are being overwhelmed with legitimately unemployed people who desperately need the benefits they are entitled to?