Defending Jindal
Bobby Jindal is taking a lot of heat for refusing to accept a small amount of strings-attached money. George Packer is comparing him to Hoover. Matt Yglesias suggests that he might be trying to drive the unemployed out of Louisiana. I find this strange.
As Joe Klein observes — he thinks this is a criticism, interestingly — Jindal is eager to accept the vast majority of the stimulus money, except for measures that tie his hands.
He’s going to accept all the money heading his way—except for the funds associated with one program, a permanent change in the rules governing the provision of unemployment insurance to part-time workers.
Matt cites Ryan Powers, who writes:
By Jindal’s own estimate, the recovery package would have funded his state’s unemployment expansion for three years, at which point the state could — if it chose to do so — phase out the program.
But let’s not forget the power of loss aversion, and the difficulties involved in phasing out new spending. This was one of the weaknesses of the COPS program, and it is a reason why the federal government phased out operating subsidies for urban mass transit systems. Accepting the money would involve changing Louisiana’s unemployment regime in a way that would be difficult to reverse.
I tend to think unemployment insurance should be somewhat more generous, or it should take the form of insurance plus loans that would facilitate a longer, more deliberate search. Asset-poverty is a huge problem for people who are trying to relocate or retrain, and more targeted assistance could help.
I can see why liberals are bothered by Jindal’s take on this issue. I think he’s being smart, sober, and responsible. Klein challenges Jindal to refuse all of the stimulus money his state has been offered, which is akin to Klein voluntarily handing over more of his income to the IRS to demonstrate the seriousness of his support for a more progressive tax code.
I’m not sure how doing the opposite of making “unemployment insurance should be somewhat more generous” is the “smart, sober, and responsible” position.
Making it difficult for Jindalites to attack “somewhat more generous” unemployment benefits is surely a feature not a bug.
— talboito · Feb 24, 11:22 PM · #
Jindal did agree to take Federal money increasing benefits by 25 dollars a week. I also don’t see the difficulties of phasing this program out—you could change the law with a sunset provision so your state isn’t liable for further payments. Nothing in the stimulus bill prevents that; if anything, that was the intent of Congressional lawmakers.
Likely Jindal (and others) are taking advantage of the fact that Legislatures get the final say on whether to take the money to make costless signals to primary voters.
The bigger story is that the spree of taxcutting and spending at the height of the oil boom left the state even more dependent on (soon to plummet) oil prices. Jindal’s decision to balance the budget through spending cuts alone will lead to substantial shortfalls in essential health and education services. He can rail against the stimulus all he wants, but without the state aid provided in the bill, it’s hard to imagine how he could deal with his budget problems without seeing his popularity and presidential ambitions plummet.
I think Matt Y made this point earlier: The reformist Republican platform of tax cuts paired with selective entitlement reform is only fiscally sound during economic booms.
— Thorfinn · Feb 25, 12:01 AM · #
“you could change the law with a sunset provision so your state isn’t liable for further payments. Nothing in the stimulus bill prevents that; if anything, that was the intent of Congressional lawmakers.”
I don’t think I agree with that at all. It seems to me that the intent of Congressional lawmakers was to make sure that stimulus money was tied to programs that would be particularly difficult for states to later abandon, permanently increasing the national entitlement system and increasing federal control over state governments. Things like expanded unemployment insurance may be touted as emergency stimulus measures, but they’re actually intended to be permanent entitlement reforms — but not the good kind.
If states are willing to pay for such programs themselves, then by all means let them (though the California model isn’t looking too attractive at the moment). But accepting money from the feds that’s going to dry up in a few years — and at that point force a choice between begging for more from Uncle Sam or raising state taxes to keep the entrenched policy going — is a chump’s bargain.
And to assume that the state legislatures are going to accept the money but create provisions to prevent a crisis in three or four years is very optimistic. They might do it, but only if someone like Jindal is pressuring them to either do that or take the full political blame when the day of reckoning arrives.
— Ethan C. · Feb 25, 02:37 AM · #