Bob’s Letter to Virginia’s Congressional Delegation
For Release: April 28, 2009 Contact: J. Tucker Martin
Website: www.BobMcDonnell.com Phone: 804-612-9111
Email: Tucker.Martin@BobMcDonnell.com
McDonnell: Change Unemployment Funding from Costly Unfunded Federal Mandate to Helpful Short-Term Assistance
In Letter, Asks Congress to Change Statutes to Help Virginia Workers, While Not Hurting Virginia’s Job-Friendly Environment
Richmond- Bob McDonnell, Republican gubernatorial candidate and former Attorney General of Virginia, today sent a letter to Virginia’s congressional delegation urging changes in the law regarding the additional unemployment funding available through the American Recovery and Reinvestment Act.
McDonnell understands that the tough job market is creating hardships for many Virginians, and we must help our fellow citizens who are hurting. However, in order to receive the additional $125 million in unemployment funding for part-time and other workers under the stimulus bill, states must permanently change their unemployment benefit categories. The federal language makes clear that in broadening unemployment categories for purposes of receiving the short-term additional funding, states cannot make any of their changes subject to discontinuation or sunset. The Department of Labor specifically addressed the question of changes to state law following acceptance of the new funding, noting:
State Law Status. Applications should only be made under provisions of state law that are currently in effect as permanent law and not subject to discontinuation. This means that the provision is not subject to any condition - such as an expiration date, the balance in the state’s unemployment fund, or a legislative appropriation - that might prevent the provision from becoming effective, or that might suspend, discontinue or nullify it.
http://wdr.doleta.gov/directives/attach/UIPL/UIPL14-09.pdf - Page 4
This new unemployment funding would last only for perhaps two years, depending on allocations made by each state, but the change in benefit categories would be permanently imposed on states in accordance with the terms of accepting the federal dollars. It is another unfunded federal mandate, and the cost of the permanent expansion in unemployment benefit categories would be borne by Virginia taxpayers, business owners and workers seeking future employment. Businesses will have a strong disincentive to hire part-time workers such as college students, and welfare recipients if faced with the likelihood of more unemployment payments, thus hurting in the long run the very people the law is designed to help. For this reason, acceptance of the money, under the current terms and conditions, is opposed by employers and small business owners statewide. This short-term funding would become a long-term burden, and would impede the ability of Virginia business owners to create new jobs in the years ahead.
Below is a full copy of McDonnell’s letter to Congress, sent today. He has been speaking with members of Congress, and staff, for the past few weeks on the issue.
Dear Virginia Congressional Delegation:
I am writing you today to express my hope that Virginia’s congressional delegation will lead the effort to affect a resolution for a contested portion of the American Recovery & Reinvestment Act of 2009 that contains provisions affecting the Commonwealth’s unemployment insurance (UI) program.
Like you, I understand these are tough economic times for Americans and that a tight job market is creating hardships for many Virginians. We appreciate the actions Congress has taken to try to assist the states during this recession. Virginia has already accepted billions in federal stimulus money, including $62.5 million in benefit money for employees who lost their jobs and are seeking full-time work. In addition the Commonwealth, through legislation sponsored this year by Delegate Sam Nixon (R-Chesterfield), has extended the period of time that unemployed Virginians can receive unemployment benefits from the traditional 26 weeks by up to an additional 33 weeks – or 59 weeks – of coverage. Through legislation sponsored by another House member, Delegate Danny Marshall (R-Danville), it has been made easier for full-time workers laid off from small businesses to retain health insurance as they seek future employment. These important steps were the result of a bipartisan effort to assist citizens during this tough economic period. It is this same spirit of cooperation that we need now as we consider how to utilize additional unemployment benefits temporarily available from the federal government.
These additional federal funds, amounting to another $125 million, provide short-term money to expand benefits to unemployed workers who are seeking part-time work and those in approved job training programs. The money was recently rejected by the General Assembly, and it appears that other states are considering similar action. The federal money comes with an unfortunate and burdensome mandate. In order to receive the short-term funding, Virginia must permanently change its unemployment benefit laws. In fact, the Department of Labor has issued a directive on the law stating:
State Law Status. Applications should only be made under provisions of state law that are currently in effect as permanent law and not subject to discontinuation. This means that the provision is not subject to any condition - such as an expiration date, the balance in the state’s unemployment fund, or a legislative appropriation - that might prevent the provision from becoming effective, or that might suspend, discontinue or nullify it.
http://wdr.doleta.gov/directives/attach/UIPL/UIPL14-09.pdf - Page 4
After the federal money runs out it would be up to the taxpayers and business owners of the Commonwealth to cover the substantial ongoing costs of providing these new benefits to new categories of workers not previously covered. This is yet another unfunded federal mandate that most employers and business owners believe will end up hurting the long-term ability of Virginia businesses to create new jobs and hire new workers.
I do not believe it is responsible public policy to create disincentives for businesses, small or large, to retain and create the new jobs that will help turn our economy around. There are many categories of part time employees like college students, temporary workers, welfare recipients and others who may not be hired in the future by business owners faced with a potential surge in unemployment claims.
Unemployment compensation policy is traditionally a state prerogative with each state making its own judgment on eligibility, funding, and programmatic implementation. The cherished principles of federalism crafted by Virginia’s founders require that we should not have a permanent change in state unemployment compensation law with the federal government exerting control and mandating long-term state business policy. It is important to recognize we have a temporary situation now with rising unemployment, and federal funds can be used now to ease the short-term pain. It is proper for the federal government to provide this money and to set the short-term requirements for its use. However, it is important to recognize that once the federal money stops, the states must resume their rightful historic roles in the determination of eligibility and funding of unemployment benefits. The current federal law fails to provide the states this right.
Today I ask you to work across party lines, as a united Virginia delegation, to eliminate the unfair stimulus bill requirement that this short-term funding be predicated on a permanent change in state law. We know Virginians need help, and the funding is available. However to ask the taxpayers and businesses of Virginia to add a significant long-term burden to get short-term help is not acceptable, especially when the long-term effect will be to hurt the very workers you are now trying to help. The solution is simple: remove the federal requirement for a permanent change in state unemployment benefits law. This will allow the Commonwealth to accept the money for the next year or two, and when the federal money ceases our programs can return to normal, ensuring our taxpayers and business owners aren’t left with another unfunded federal mandate.
I advised Governor Kaine that I want to work together to ensure Virginians get the help they need now. Let’s work to implement the solution that benefits all of our citizens. We need to do all we can to help create new jobs and get our citizens back to work.
With great respect for your service on behalf of the citizens of the Commonwealth.
Sincerely,
Robert F. McDonnell
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Authorized by Bob McDonnell. Paid for by McDonnell for Governor