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GOP Governors Threaten Rep. Jim McDermott's Stimulus Victory

By Chris Kissel February 23, 2009

Rep. Jim McDermott (D-WA, 7) scored a modest victory with the stimulus package when he successfully added a $40 billion provision to fund the U.S. Unemployment Insurance program. McDermott used his new position of power as chair of the House Family Income Support Subcommittee, which controls the unemployment insurance cash flow, to secure the deal.

But if a few Republican governors across the country have their way, the realization of McDermott's vision of an expanded UI program may come undone, at least in part. Outspoken in their opposition to the stimulus package, Governors like Louisiana's Bobby Jindal now say they'll accept just about everything the big plan has in store for their states—everything except McDermott's hard-fought unemployment insurance money.

McDermott's $40 billion add included a $7 billion incentive for states to expand and modernize their unemployment insurance programs. Republican Governors like Jindal say that will bring an unfair expense on the government and, eventually, an undue burden on tax payers.

Gov. Jindal says his state will accept an additional $25 a week per insured worker from the Federal government, one of the other provisions in McDermott's plan. He won't, however, expand his state's UI program to include part-time workers, thus forgoing about $100 million Louisiana would have received from the $7 billion pool for UI expansion.

His office argues that once the Federal money runs out, the expanded UI programs will saddle state governments with a tab they can't afford, passing the burden to taxpayers. “I strongly suggest that other states also look closely at this provision in the bill so they can also avoid ultimately passing on a significant tax to businesses that will be left paying for this expansion of benefits," said Jindal in a statement. The NYT reports that Jindal is one of several Governors who say they'll reject the unemployment insurance money.

Washington state, while not necessarily ahead of the curve on unemployment insurance reform, has caught up fast in the past couple of weeks by passing a bill that expands the state program and raises the amount of money the state provides unemployed workers by $45. This increase will go along with McDermott's secured $25 increase from the Federal government.

Washington state's own unemployment insurance bill zipped through the State Legislature this month and Gov. Gregoire signed it last Monday—the state's expanded UI program will now cover part-time, disabled, and low-wage earning workers, workers enrolled in job training, and veterans of the armed forces, and the amount of money received by those who are insured will increase by a sum of $70.

As far as Lousiana's excuse for not expanding its UI program, Gregoire spokeswoman Laura Lockard told PubliCola: "I don't think we'll be in a similar position," referring to the $4 billion Washington state's program has in reserves.

Rep. McDermott's office wasn't available for comment today.
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