Good to know that some governors are putting principles ahead of political expediency. It makes no sense to use money you don’t have, on whay you don’t need all in the name of toeing the Barack Obama economic line… DMN
Gov. Rick Perry, joining a handful of his fellow Southern Republican leaders, said Thursday that he was rejecting $556 million in federal stimulus money for unemployed Texans because it had too many strings attached.
He said the federal provisions would require unprecedented changes in state rules on who is eligible for unemployment payments. He also argued that the funds – which Democrats say would update benefits so that more women, elderly and student workers could qualify – would place additional burdens on businesses, leaving them to pay the added costs when the federal money ran out.
Governor Rick Perry
Instead, businesses should be able to use the money to create jobs, Perry said.
“That is why I am so concerned about the belief that has gained a foothold in our national consciousness that the best and only way to solve our nation’s problems is to drown them with taxpayer dollars,” said Perry, announcing his decision at a Houston hardware store.
The announcement, following weeks of speculation about whether Perry would reject part of the massive economic stimulus package, set off charges that the governor was forsaking, for political expediency, about 45,000 Texans who need financial help fast. Conservative and business groups applauded Perry’s decision.
Some Democratic lawmakers said they hoped to marshal enough votes to take the money over Perry’s objection, though that would be difficult.
“Texas covers the smallest percentage of unemployed workers of any state,” said Don Baylor Jr., an analyst for the Center for Public Policy Priorities, an advocate for low-income Texans. Four out of five laid-off workers are not eligible for unemployment benefits, he noted.
Criticism of decision
Pennsylvania Gov. Ed Rendell, a Democrat who chairs the National Governors Association, called Perry’s decision to reject the unemployment funds “stunning.”
“It’s a terrible call. It is based on politics,” he said, adding that while the federal stimulus does require some states to add coverage, it doesn’t require the changes to be permanent. Lawmakers could roll back the expansion in two years, though they are often reluctant to take away benefits from voters.
“How do you sit across the table from a part-time worker working three part-time jobs, doing his best to keep his family afloat, didn’t get health care, didn’t get anything for it, all three of his jobs collapsing?” said Rendell, meeting with reporters in Washington.
“What does that make you? Does that make you a good Christian?” he asked. “There comes a time when the hurt that individuals are facing becomes paramount over whether I’m going to have a budget problem three years down the road.”
Perry’s press secretary, Allison Castle, said that the compassionate response for government is to “foster a climate where jobs can be created while at the same time provide the resources to help those who truly need it.”
Perry told Fox News’ Neil Cavuto that the state would take care of Texans who qualify under the current rules.
“This was pretty simple for us. Keep things going like they’re going in Texas,” said the governor, who has touted the state’s job-creation rate as the economy has soured. “We can take care of ourselves. And we do not need any more strings from Washington attached to programs.”
Perry and governors such as Mark Sanford of South Carolina and Bobby Jindal of Louisiana have complained that the economic stimulus bill Congress approved and President Barack Obama signed into law wastes taxpayer money, and each has rejected a small piece of their state’s package. Other governors, including Republicans such as Arnold Schwarzenegger of California, have said they would gladly take any money the Southern Republicans turn down.
Rules for using money
Provisions in the federal bill allow Texas to receive $556 million if it broadens its eligibility – for instance, lets part-time workers collect benefits even if they search for less than full-time work, and grants extended benefits to people in retraining programs.
The state also would have to consider recent wages in calculating a laid-off worker’s income, not the current method that can go back nearly 18 months.
Texas Association of Business president Bill Hammond called such changes radical and praised Perry for rejecting the federal bait. That group and the Texas chapter of the National Federation of Independent Business have argued that the changes would increase taxes on employers.
“Higher costs for employers mean fewer jobs are created, leading to a weakened economy – which is not good for Texas or Texas workers,” Hammond said.
But Bill Allaway, president of the business-funded Texas Taxpayers and Research Association, told a House panel Tuesday that if the stimulus money is rejected, employers that pay into the state’s unemployment fund would be hit with a huge tax increase to cover the fund’s deficit.
The stimulus money could offset the deficit in the short term and buy time for the economy to bounce back.
“My advice is to take the money and run,” Allaway testified.
The U.S. Federal Reserve in Dallas has forecast that the Texas economy will lose up to 300,000 jobs in 2009, and the unemployment rate was at 6.4 percent in January. Monthly unemployment claims have more than doubled over last year.
Some Democrats in the House and Senate said they would work to build a bipartisan coalition that could bypass the governor and accept the stimulus money. But lawmakers would have to pass legislation to change the state’s unemployment eligibility laws, with enough time and support to override a Perry veto. The session ends in 80 days, and it would take a two-thirds vote in each house to overrule the governor.
A special House committee studying the impact of the federal bill voted, 5-1, Thursday in favor of a nonbinding resolution that the Legislature override Perry’s refusal to take the money.
Texas still is in line to receive $16 billion in stimulus funds earmarked for transportation, education and health and human services projects.
