02.27.09

Perry and the stimulus – it’s all or nothing at all

Posted in Around The State, Commentary, Right Wing Lies, The Budget, The Economy, The Lege, Uncategorized at 4:54 pm by wcnews

While Texas Gov. Rick Perry and the other Southern “wing-nut” governors – boy is that redundant – have been running around saying they’re going to deny certain stimulus funds, that may not be possible, Stimulus Isn’t A La Carte Menu.

Senator Charles Schumer released the following letter Tuesday urging the Obama administration to notify governors that they must certify acceptance of stimulus funding in full or not at all, rather than selectively approving and rejecting the law’s various components.

It’s all or nothing at all. But Rep. Jim Dunnam (D-Waco) and many more in the legislature have known from the beginning that Perry would likely some kind of ideological shenanigans.  They are preparing to counteract it, Lawmakers may swipe Rick Perry’s veto pen. Kuff has great info and links to the debate that’s ongoing in the legislature over whether or not to take certain portions of the stimulus money.  In particular the part that  would be the most likely to be turned down – unemployment insurance (UI).

I can understand the reluctance to taking one-time money for potentially ongoing expenditures. But sometimes these are things you should have been doing anyway, and will at worst take on a relatively small expense while getting a worthwhile return on it.

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Funny, you could say the exact same thing about those big property tax cuts we enacted last session when we had some extra cash lying around. I don’t recall there being a whole lot of angst from certain quarters about how we were going to pay for it going forward – there may have been something about the beauty of the free market, or the Laffer curve, or magic pixie dust, I’m not sure. You want to talk about something that’s tough to get rid of, try repealing an irresponsible tax cut. In contrast, this would cost about $150 million per biennium – likely less in the future when the economy improves and more people are working again – which is about 0.2% of the total state revenue we have for this period. It would also help a lot of people who could really use it, and would be quite economically stimulative, as the recipients would be spending all that money on frivolities like food and housing. Seems like an easy decision to make, if you ask me.

The ironic part about Perry and some of his GOP cohorts that want to turn down the UI money is that it is one of the most stimulative aspects of the American Recovery and Reinvestment Act (ARRA), Washington Throws the Economy a Rope.

Extending unemployment insurance and expanding food stamps are the most effective ways to prime the economy’s pump.

When a former Texas GOP chair is saying we need this, then things must not be looking good, Unemployment Fund situation dire.

At yesterday’s hearing of the Texas Senate Nominations Committee, Texas Workforce Commission Chairman Tom Pauken didn’t mince words about the dire situation facing the state’s unemployment rate — and the fund the state relies upon to pay unemployment benefits. The Unemployment Compensation Trust Fund will be flat broke sometime next fall if current unemployment trends continue. Pauken was forthright, but not alarmist: he has reasonable-sounding plans in mind for borrowing money to keep the system running. But his remarks certainly put in perspective the on-going argument over whether the state should take $555 million in federal economic stimulus money. As you know, Gov. Rick Perry is suspicious of the “strings” attached to the federal dollars — which include using a more timely data that would help unemployed workers get assistance faster. According to the Austin American-Statesman, Texas “disregards the most recent quarter and uses the previous four quarters.” Some people believe this particularly affects low-wage workers who go in and out of the workforce.

As if on cue, Jobless Angry at Possibility of No Benefits.

[Henry] Kight and other unemployed workers said they were incensed to learn they were living in one of a handful of states — many of them among the poorest in the nation — that might not provide the expanded benefits.

“It just seems unreasonable,” Mr. Kight said, “that when people probably need the help the most, that because of partisan activity, or partisan feelings, against the current new administration, that Perry is willing to sacrifice the lives of so many Texans that have been out of work in the last year.”

There’s more on why UI is so stimulative.

The crucial role played by unemployment benefits in limiting declines in consumer spending is underscored by recent academic research showing that the amount a family spends on food falls by seven percent, on average, when the head of a household becomes unemployed but would decline by 22 percent in the absence of unemployment benefits. Other research confirms that the unemployment insurance system has been an extremely effective mechanism for stabilizing the economy during a downturn. Both unemployment insurance and the tax system are “automatic stabilizers” — they help to reduce the severity of a recession by automatically supporting spending during a downturn. Recent academic research has shown that, dollar for dollar, the UI system is eight times as effective as the entire tax system in mitigating the impact of a recession.

But beyond how stimulative this is for our economy there’s the moral aspect of this. Don Baylor from the CPPP gets the last word.

“When people lose jobs through no fault of their own, their families shouldn’t have to go hungry, and their communities
shouldn’t have to suffer economically. Unemployment insurance benefits help keep families and communities above water in tough economic times. Unemployment insurance is more important than ever in Texas: our unemployment rate shot up from 4.4 percent to six percent in the last six months of 2008, meaning more than 700,000 Texans are now unemployed. To put that in perspective, that’s more people than live in Corpus Christi, Lubbock, Waco, and Nacogdoches, combined. At the same time, Texas ranks 50th among states in the share of jobless state residents receiving unemployment insurance benefits,” CPPP Senior Policy Analyst Don Baylor, Jr., said.

“Texas families and communities are working hard to stay afloat, and Congress made resources available to the Texas Legislature to strengthen our unemployment insurance systems. The Legislature needs to take advantage of available funds so Texas can come out stronger on the other side of this recession,” Baylor added.

It’s just the right thing to do in these tough economic times.  Hopefully the stimulus will be “all or nothing at all”, mandated from the federal government, and Perry and the other governor’s can use that for their political cover – they made me do it.  It doesn’t really matter what excuse they use, what matters is people get the help they need and our economy gets rolling again.  After all that’s what we all want.

2 Comments »

  1. Amerloc said,

    February 27, 2009 at 8:20 pm

    The double standard frustrates me: when it comes to education, they want it to be all about data and results. But when it comes to the working family, they want to make it about something else altogether. Multiple expletives deleted.

  2. Eye on Williamson » Perry going to extremes said,

    March 12, 2009 at 2:59 pm

    [...] It still hasn’t been decided, at the federal level, whether the states will be able to “pick-and-choose” from the [...]

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