03.12.09
Perry going to extremes
As state unemployment soars across the county and in Texas, (see graphic below), Gov. Rick Perry had decided, for political reasons, to deny those in need, Perry’s ‘Let Them Eat Cake’ Press Conference. His ideological and inaccurate statements about Unemployment Insurance (UI) are, at the least, disappointing. The most egregious part is that economists agree that UI brings the most “bang for the buck” next to food stamps as a stimulus in a struggling economy. That’s what makes statements like this from the press release so bothersome.
Strings attached to the unemployment insurance stimulus dollars would require an unprecedented change in Texas’ definition of unemployment, increasing the tax burden borne by Texas employers. This increased burden would counteract the stimulus package’s objective of job creation by leading companies to limit hiring and raise prices on products, hindering their ability to overcome the economic crisis and ultimately limiting growth.
Not to mention the fact that businesses are looking at massive tax increases because, as the DMN put it, Texas is blowing through its unemployment insurance trust fund.
The state paid $64 million in benefits last week, more than twice as much as in the same week last year, Texas Workforce Commission administrators told a special House panel studying the federal stimulus package.
Larry Temple, the commission’s executive director, testified that the trust fund is expected to have just $48 million on Oct. 1, when it is required by law to have $860 million.
“We’re going to have some tax increases,” he said.
Very soon, Temple said, the commission’s staff will outline alternatives for replenishing the fund through some combination of higher taxes, borrowing from the federal government and issuing bonds.
Under the recently passed stimulus bill, Texas could receive $556 million immediately if it broadens eligibility to cover some nontraditional employees, such as part-time workers.
Only the legislature passing a bill to expand UI coverage with a veto proof majority can save this. It still hasn’t been decided, at the federal level, whether the states will be able to “pick-and-choose” from the stimulus.
This is making the governor and his party look more extreme, and out of touch with the issues that are facing Texans. This is just the kind of issue that will add to the Texas GOP’s troubles in Texas. It’s just too bad so many Texans will have to suffer – being caught in the GOP crossfire – so Gov. Perry can keep his “wing nut” street cred for the GOP primary next year.
Full umemployment numbers for all 50 states are here.
Lege versus Gov on unemployment funds « Off the Kuff said,
March 12, 2009 at 6:44 pm
[...] (PDF), which notes that Texas is already mostly in compliance with the federal law for the funds. EoW, Vince and Vince again, Eileen, McBlogger, and the CPPP have more; I also have a couple of press [...]
Eye on Williamson » Dallas Fed says Rougher Ride in 2009 said,
March 17, 2009 at 9:42 pm
[...] With those kind of job loss numbers, unemployment insurance (UI) factors ever larger in Texas’ economic future. The whining of those on the radical right is Hooverism re-cast for a new century. The macropocalypse is upon us. Gov. Rick Perry’s political posturing is not only bad for the businesses on whose behalf Perry claims to be advocating, but by missing out on the jobless benefits’ calming effect, it threatens to make our situation even worse. Economists agree that bad times are coming, even if only for a short time, and that UI is one of the best ways to stimulate the economy in a recession. [...]