Post by anointedteacher on Mar 13, 2009 18:06:30 GMT -5
Democrats will push to overturn Perry move to reject some stimulus funds
By DAVE MONTGOMERY and AMAN BATHEJAdmontgomery@star-telegram.com
AUSTIN — Gov. Rick Perry’s decision on Thursday to turn down $555 million for expanded unemployment benefits from the federal stimulus package became an instant issue in his re-election campaign and provoked a confrontation with Democratic lawmakers who vowed to try to overturn the decision.
But business groups and conservatives in the Legislature stood behind the Republican governor, saying that Perry’s refusal spares Texas from paying a big tab later when the federal dollars run out.
Perry said he would accept most of the roughly $17 billion slated for Texas in the plan.
But accepting the jobless aid would require the state to enlarge its unemployment insurance program, subjecting Texas employers to millions of dollars in debilitating higher taxes, he said.
Perry assured jobless Texans looking for work that they would continue to receive unemployment benefits.
Perry unveiled his decision at a news conference in the middle of Bering’s Hardware store in Houston. Supporters were invited to watch the announcement via a live video stream on his political Web site, RickPerry.org.
"I am here today to stand with Texas employers and the millions of Texans they employ to resist further intrusion into their businesses through an expansion of our state’s unemployment insurance program," Perry said.
Perry has signaled for weeks that he was uncomfortable with taking parts of the stimulus money that would amount to increasing the state’s social-services net, which the state would have to continue funding once the money ran out.
Democrats denounced the decision as a brazen political move that endangers thousands of unemployed Texans. An estimated 250,000 Texans have lost jobs since the recession began.
"After declaring his unconscionable decision today to turn away $555 million in unemployment relief meant for a rapidly increasing number of unemployed Texans, Governor Perry will be resting comfortably tonight in a home paid for by Texas taxpayers," said Sen. Wendy Davis, D-Fort Worth.
"As he does, families throughout this state will be huddling at their kitchen tables, poring through mounting unpaid bills and wondering how they are going to survive."
On Tuesday, House Democratic leader Jim Dunnam, D-Waco, chairman of the House Select Committee on Federal Economic Stabilization Funding, filed a bill to create the State Fiscal Responsibility Office to oversee and investigate spending of stimulus money. It would also require monthly status reports on stimulus funds.
On Thursday, the committee voted 5-1 to push ahead with proposed changes in the Texas unemployment insurance law to meet federal criteria for accepting the money.
Rep. Myra Crownover, R-Denton, cast the lone dissenting vote, saying that the decision was rushed and excluded some Republican members who were not aware of the planned resolution. Rep. Jim Pitts, R-Waxahachie, joined four Democrats in supporting the resolution.
Benefits at issue
To be eligible for the stimulus money, Texas must change the base period for calculating unemployment benefits and also grant them to part-time workers and those who leave their jobs for "compelling family reasons," including employees who quit because their spouse took a job elsewhere.
The federal criteria also extend unemployment benefits to those enrolled in job-training programs.
Although changing policy would cost the state more, the select committee said in its resolution that Texas would get a net gain of $474 million in stimulus money. The state’s Unemployment Compensation Trust Fund is facing a potential deficit of at least $800 million by September.
State Sen. Leticia Van de Putte, D-San Antonio, the Democratic leader in the Senate, said she is urging lawmakers "to go full force" to make the changes to enable Texas to receive the money. She acknowledged that a veto by Perry is inevitable but said that Democrats, with the help of GOP allies in the Republican-controlled Legislature, would then try to override it.
U.S. Rep. James Clyburn, D-S.C. and majority whip in the U.S. House, added a clause to the $787 billion stimulus bill that enables state legislatures to bypass governors who reject the money.
Business, labor reaction
The Texas Association of Business, which represents 140,000 employers, applauded Perry’s decision, saying it spared employers from higher unemployment taxes, which in turn would have resulted in fewer jobs and a weakened economy.
"These changes would have left employers on the hook for a new job tax that would have cost employers hundreds of millions of dollars with no end in sight," the group said in a statement.
T.C. Gillespie, president of the Tarrant County Central Labor Council, said Perry’s move will be devastating at a time when several prominent employers are slashing their local work forces.
"Where’s that money going to come from, when we don’t have enough money in the state to fund necessary expenses now?" he said.
Gillespie, whose organization represents AFL-CIO-affiliated unions in eight counties, accused Perry of political posturing at the expense of unemployed workers.
"He’s got a U.S. senator in the same party he’s in, eyeballing the office that he wants to retain in a year," Gillespie said. "So anything that he thinks will stimulate his position with the conservative right, he’s going to attempt to do."
Twelve members of the Texas Conservative Coalition in the Legislature, including Rep. Phil King, R-Weatherford, wrote the governor to compliment Perry for rejecting what they called a "bad deal for Texas."
Framing his decision as a stand for state sovereignty, Perry said Washington politicians are trying to push their values on the Texas government.
"Again and again, we hear the purpose of the federal stimulus legislation is to create jobs, but this portion will actually slow job creation," Perry said. "If Washington really wanted to help, wanted to respect our rights as a state, they would send money to the unemployment account with no strings attached just like they did in 2002."
Perry touted Texas’ economy, relatively strong compared to the rest of the country, as proof that the federal government shouldn’t be telling him how to govern in an economic crisis.
"I would tell my friends in Washington that if they want a blueprint for how to get the economy back on track, look at Texas," Perry said.
Perry is the latest Republican governor to turn down federal stimulus money. Louisiana Gov. Bobby Jindal said he would not accept nearly $100 million in stimulus money to expand unemployment benefits. South Carolina Gov. Mark Sanford asked for a federal waiver Thursday to spend $700 million in stimulus money to pay down state debt and said if the waiver wasn’t approved he would not pursue the money. That state’s Legislature is expected to make sure the state gets the money anyway, making Sanford’s move largely symbolic..
This report includes material from The Associated Press.
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Instant campaign issue
Republican Gov. Rick Perry’s two opponents in the 2010 governor’s race — Republican U.S. Sen. Kay Bailey Hutchison and Democrat Tom Schieffer of Fort Worth — questioned the decision to reject federal funds.
"I just don’t follow the logic," Schieffer, a former U.S. ambassador in the Bush administration, told the Star-Telegram in a phone interview, expressing hope that the Legislature will override the decision. "There are an awful lot of full-time and part-time workers who are feeling the pain. To refuse it just doesn’t make any sense to me."
Hutchison, who will face Perry in the Republican primary in March 2010, issued a statement saying, "I hope that the governor has carefully thought through the potential outcomes of today’s decision. With the state unemployment fund dangerously close to falling below the legal threshold, it is imperative that the governor does nothing that potentially burdens small businesses with higher taxes in tough economic times or pushes those who have recently become unemployed and their families into economic peril."
