Wednesday, July 29, 2009

Senator Kay and Governor Rick of Texas Getting Fungy with Money

Senator Kay Bailey Hutchison of Texas will be running against Governor Perry for his job. She is taking the line that he should have accepted Federal stimulus money to help with unemployment, which is rising. Perry takes the line that he is standing up to the government, always a good thing among a certain sector of the Republican base that lacks discernment about when you should stand up, and when you should be practical, shut up, and sit down.

What is funny, the oddity, is the ridiculousness of both their positions, though Kay comes out a bit more sensible by a centimeter of rationality.

Senator Hutchison initially rejected the stimulus package, and one assumes for reasons that can be reduced down to 1) it won't work and 2) it adds to the deficit and 3) it would likely be filled with a huge amount of wasteful spending.  Those reasons are all somewhat valid, but in the face of the biggest economic setback since the depression, one should come with alternatives if you are taking that line. Republicans, generally, have not been overly articulate in providing those alternatives.The line has often been cut taxes and rough it out.

We are left with Kay now criticizing the current governor for money she voted against. In effect, had she gotten her way on the stimulus package, she would have no ammunition to drop on Perry's head. Her rationale is that since the unnecessary evil (stimulus) was done, Texas might as well not be overly dignified in losing its share.

Texas thus becomes the guy at the office party who thinks office birthday parties are stupid and a waste of time and money, and who has contributed nothing, but makes sure he gets a slice of the cake. You know, so it won't go to waste; one has to be sociable and all:
Hutchison said she voted against "every dollar" of stimulus spending but contends that, once the recovery expenditure was approved by Congress, Texas was entitled to get "its share of those dollars." She said she avoided raising the issue while the Legislature was meeting this year to avoid injecting politics into the session.
The surge in unemployment claims over the past year has drained the state’s unemployment trust fund, forcing the Texas Workforce Commission to seek a federal loan of at least $643 million to continue paying benefits. Texas employers also face an increase in the taxes they pay to support the fund, beginning in January.
(Star Telegram)

Meanwhile Perry's position lacks a certain sense as well. Or shall we call it, a highly nuanced way of approaching a problem. He rejected the money for unemployment because it had strings attached that, in theory, might force Texas to be more generous with their unemployment funds in the future. Instead, and with Texas short of funds, they will seek a loan for the money to cover unemployment benefits.

Perry goes on to say that that's what the Feds are there for, and it worked for them in 2003. Thus, he would rather take on a loan, debt, to provide seven weeks or so of benefits, instead of taking the Federal free money, simply because he does not want to have to expand the benefits of a program down the road that is, as of today, not quite funded.
The stimulus money, he said, would have provided less than seven weeks of benefits and would have slapped Texas employers with long-term taxes by requiring the state to expand its benefits program. But Hutchison said she obtained a Labor Department ruling saying Texas could have reversed the added unemployment benefits without penalty.
Everyone wants the money. Everyone needs the money. But everyone wants to pretend, ideologically, that they don't. Fungibility games.

Mind you, it's not like the strings attached to the package are exceptionally evil or onerous. They ought to be part of the general unemployment package to begin with. The requirements, for Texas, include providing unemployment benefits to part-time workers and calculating benefits based on the four most recent quarters instead of the past 18 months.

One suspects that both politicians should be praying that the economy does not improve, or that if it does, people's memories are incredibly short.

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