Why Vermonters May Fear “Help" From The Feds

Emerson Lynn on Politics

Rep. Peter Welch this week said he would introduce legislation to give Vermont “a little bit of breathing room” in dealing with its near defunct Unemployment Insurance Trust Fund.

His proposal would be to forgive Vermont the need to pay interest charges on the amount of money it will borrow from the feds to keep the trust fund solvent. It will reportedly save Vermont $20 million.

Other states will benefit as well, this isn’t about Vermont by its lonesome. It’s anticipated that together states will need to borrow almost $100 billion from the federal government to keep their unemployment funds afloat.

Several things spring to mind: First, forgiveness may work on a personal level, but it doesn’t exist on a balance sheet. The money comes from somewhere and since we are deeply in debt as a nation, the $100 billion needs to be borrowed, and those who lend expect to be paid back. With interest.

Mr. Welch is upfront about this and is clear his proposal cannot be considered a bailout. Under law the interest paid on the borrowed money must be paid out of a state’s general fund. His effort would spare the state that expense – for the moment. But the real concern is how the congressman’s intentions could be misinterpreted here in Vermont.

The fear is that legislators would interpret the potential “savings” as a safety valve and not take the action necessary to put the fund on a solid long-term footing.

This angst is building within the statehouse, and for good reason. The Legislature last year appointed a bipartisan summer study committee to undertake a comprehensive review of the issue and to offer recommendations as to what should be done. Instead, the committee is reportedly set to offer a list of alternatives without placing its imprimatur on any particular proposal. That refusal means the issue is being tossed back into the Legislature’s hands.

Which means it becomes more politically difficult to resolve than it would have been otherwise.

The purpose of a bipartisan study committee is to do the work, make the recommendations, and essentially take the heat. By offering “alternatives” for their colleagues to choose among, the committee accomplished very little, essentially abdicating its responsibility.

It’s a tough issue politically. It’s fairly clear practically. Two sides are involved: employers and the unemployed. And it will take the two sides to make it work. Employers must face the fact that the taxable wage base will need to be raised, and the unemployed must face the fact that the state’s benefit package – of the richest nationally – needs to be trimmed.

This, of course, has raised concerns on both sides. Employers are fearful that the taxable wage base will be raised too high, too fast. The unemployed are fearful that they would be asked to live on less. If the committee had done its work properly, the necessary compromise could have been presented and the debate could have begun. It didn’t. The air in the legislative chambers is already swirling with hot claims that consideration of trimmed benefits will not be considered.

If true, that would be unfortunate. To say the least.

When the legislative leaders convene the much touted jobs forum, they should ask those who do the employing how they will summon the resources necessary to hire new employees if the taxable wage base is, say, doubled.

They should ask prospective businesses how interested they are in locating in a state where the taxable payroll base is upped, with the state holding firm to a benefits package that is above most other states – states that would be thrilled to have them.

But what they should also do is to ask those who are employed how they feel about the Legislature pursuing a policy that makes it difficult for employers to offer raises, or to offer better benefits because the till is being picked clean.

In other words, it is disingenuous for legislators to claim an interest in creating new jobs – or even protecting what we have - when they are pursing a policy that might create a lopsided financial burden on every single business in Vermont – the very people who would like nothing more than to grow and to hire new employees, or to bring their old employees back.

Let’s hope the study committee rethinks its position and actually offers some leadership. That would be a better definition of “a little breathing room.”

(Emerson Lynn is editor and publisher of the St. Albans Messenger where this essay first appeared.)

Comments

[Vermont Woodchuck]

Peter Welch is sitting on the printing press. Need a couple of bucks, here ya go! Vermont's answer to Daddy Warbucks! (Plus the other swell pair)

When he walks out of the House, he keeps his pension, regardless of what transpires; not so VT. Business Owner. (See the various Congressional crooks in jail & what awaits their release)

It's not his money!