Regardless of the rewrites attempted by Sen. Kay Bailey Hutchison’s unannounced gubernatorial campaign, Texas Gov. Rick Perry and the conservatives in the Legislature were right to stop the string-laden “stimulus” dollars from entering Texas’ unemployment fund. After having voted against the stimulus package in DC, Hutchison now says Texas should have taken those costly dollars.
Let’s remember that Hutchison was mostly silent on issues facing the state during the legislative session, despite suggesting for months she’ll be running for governor. She was notably absent during the debate over the appropriate and inappropriate use of federal stimulus money.
The conservative movement and the responsible business community (large and small businesses alike) were uniformly opposed to taking those burdensome dollars. Not only would it have required massive tax increases in the future, it would have done so with requirements that the state forever alter our unemployment insurance laws. (The feds now claim they were joking about that “forever” part, but the federal law still clearly states that the rules must be permanent.)
Both the Texas Association of Business and the National Federation of Independent Business loudly urged lawmakers to reject the use of stimulus funds. As did nearly every member of the Texas Conservative Coalition, the conservative caucus of the Texas Legislature. A mid-session report by the group pointed out that “federal matching funds drive increases in state spending, exposing taxpayers to increased tax liability from both federal and state governments.”
Everyone (read, conservatives) understood what was at stake; we had two choices:
(1) Take the $555 million in federal money and be on the hook for much higher taxes for a very long time. Texas would have to adopt the same kinds of employment practices that have devastated other states. And even then still see the unemployment insurance fund run out of cash.
(2) Reject the stimulus dollars, let the fund run low, and then get a zero-percent loan from the federal government with a temporary hike in the unemployment tax.
Option 2 has been taken once before; while not what one hopes for, it keeps Texas in the drivers’ seat on the policies we live and work under. It also keeps our unemployment insurance tax burden low.
Option 1 would let Washington, DC, write our insurance policies.
From her statements over the weekend, it would seem our senior senator is now more comfortable with Washington-based decisions than in pursing policies shown to work for the Lone Star State. It seems she is more interested in following to the whims of the Democratic Congress on the rules governing Texas’ business climate, than listening to the experience of the state’s small business owners.
The federal stimulus legislation was bad public policy — as Hutchison tacitly acknowledged by voting against it. The pro-taxpayer position was take the stimulus dollars that didn’t require policy changes and for which there were no on-going costs. Use the dollars to fill in the gaps, not create new obligations.
The state’s long-standing unemployment system has meant that when times are good, business owners get tax rebates — as happened just two years ago. The state has adopted strict policies about who does and doesn’t qualify, ensuring folks are looking for work and accessing UI only when they truly need it.
Texas’ responsible policies would have been tossed aside under the federal stimulus plan. Is that Sen. Hutchison’s plan for Texas, or has she merely been unaware of how how strongly her home state has performed — employment-wise — compared to the rest of the nation?
Perhaps after 16 years our senator has spent too much time listening to the arguments of the grow-government left in the District of Columbia.
It would have been irresponsible to take those federal UI dollars. Frankly, it represents a lack of leadership to have voted against in the Senate what she now demands Texas to have accepted. And it is always poor judgment to cede the state’s clear authority over such matters to Washington, and certainly to the Obama Administration.
As one who has long admired Sen. Hutchison, her original silence on matters concerning the state was far preferable to this sudden cheerleading for what is clearly the most fiscally irresponsible position.