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January 23, 2009
Faced with a severe recession, it’s not a bad thing for government to look busy. When public confidence is shaken, creating the impression that problems are getting fixed can be as important as actually fixing problems.
That’s one argument for Gov. Chris Gregoire’s plan to make emergency withdrawals from Washington’s $4 billion unemployment trust fund. The prospect of injecting more money into the pockets of the jobless and businesses may deliver a healthy if modest psychological lift.
Still, it would be optimistic to expect that passing out $200 million in extra unemployment benefits and another $204 million in tax breaks for companies will do much to jump start Washington’s stalling economy. It’s just not enough cash to do the job.
The only outfit with that kind of money is the federal government, whose Democratic leaders already intend to enrich unemployment benefits nationwide to the tune of $43 billion, with additional billions to be earmarked for food stamps, home heating subsidies and Medicaid.
The Obama administration and Congress can print money to their heart’s content, postponing the reckoning to another day. Gregoire and the Legislature cannot.
That said, boosting state benefits by $45 a week and cutting payroll taxes a bit can’t help but do some good. Give a check to someone who is comfortably employed, and he or she is likely to put it in the bank. Give a check to an unemployed worker, and he or she is likely to spend it on groceries or rent – thus recycling the money into a distressed economy.
Lowering payroll taxes would make it easier, however marginally, for businesses to keep their workers from joining the ranks of the unemployed.
The governor’s unemployment stimulus plan would require expedited treatment – legislative passage by early next month. Before approving it, lawmakers should give a hearing to the employers who’ve been on the hook to finance the trust fund.
That $4 billion is larger than any other state’s unemployment fund – and we’re talking straight dollars, not per capita. It far exceeds federal standards for a recession-proof reserve.
Its size is an argument for drawing it down some. But it’s also an argument for listening to employers who feel the state has been levying excessively high payroll taxes all along. They deserve a say before the Legislature changes the rules on how the money is spent.
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