The TPPF unemployment insurance debate

Mar 31, 2009 By Paul Burka

The Texas Public Policy Foundation hosted a debate last week on the subject of whether Texas should accept the stimulus funds for unemployment insurance. The audio is available on the TPPF web site here. The participants were Republicans Kelly Hancock and Dan Gattis and Democrat Mark Strama. Craig Eiland, who was originally scheduled to participate, had a conflict. I am going to summarize the arguments below: Hancock I heard people saying that the way to fix this is to add more people to our system, because we're paying out faster than we're bringing in [money]. This didn't sound right, that we need to add people to our rolls while we're paying out money in a fund that is not keeping up with the payments that we're paying out today, because we'll get a lump sum of money up front. I look at this as what's best for Texas long-term instead of a short-term kind of mentality. If you look in a very short-term perspective, these funds are extremely beneficial to us. My wife and I started a new business, a farm and ranch store, it's been successful. Our business is up significantly. With our business, I had to borrow money up front so I could make more money in the end. The unemployment insurance money actually does the opposite. Rather than increase the revenue side long-term, it increases the expense side long-term. It does increase the revenue side short-term. The impact of business is insignificant except when you draw the lines [Hancock and Strama both used slides that were provided by the Workforce Commission, although they did not have the same data] out to infinity and beyond.

Perry to Unemployed: Drop Dead

Mar 16, 2009 By Paul Burka

Aside from responding to hurricanes, I cannot remember the last time Rick Perry did something that resembled leadership. It's just not in him. The rejection of the stimulus package for unemployment compensation was all about political posturing: "I am here today...to stand with Texas employers and the millions of Texans they employ in resisting further government intrusion into their business by opposing the federal government’s push to expand our state’s unemployment insurance program." The math in favor of accepting the money was so overwhelming, and the need is so obvious, that Perry could not make a rational case for rejecting it, except to resort to attacking the federal government. Well, why should anyone be surprised? So many years, so little to show for them. The rules do require an expansion of the unemployment insurance program in order for the state to receive the entire $555 million that is available. The Legislature must change state law to do three things: (1) Calculate the base period for unemployment by including the latest completed quarter. The estimated cost is around $212 million over five years (as determined by the Workforce commission). (2) Allow persons to qualify for unemployment benefits if they voluntarily left their jobs due to spousal violence, disability in their immediate family, or spousal relocation. The estimated cost is $23 million over five years. (3) Make part-time workers eligible for unemployment benefits. This would cost $146 million over five years. (Alternatively, the state could change its job training provisions.)

He Told Us So

Dec 1, 1998 By johnbjudis

University of Texas economist Jamie Galbraith used to get laughed at when he preached the gospel of full employment. No one’s laughing anymore.