Bob Riley rejects portion of stimulus money
Despite Alabama’s rising jobless rate, Gov. Bob Riley on Monday rejected $66 million in the federal economic stimulus funds earmarked to help states fund unemployment benefits.
Riley made the announcement after returning from a National Governors Association meeting in Washington, where he and other governors met with President Barack Obama Sunday night.
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Riley said the stimulus law requires states to change their laws to expand jobless benefits to those who don’t normally qualify, such as those who work part time or who leave their job for a “compelling family reason.”
Riley said that provision could cause a tax increase on Alabama employers, and potentially their employees, when the stimulus dollars expire.
The $66 million is about 2% of the estimated $3 billion Alabama stands to receive from the “stimulus” spending orgy. Riley thus joins a handful of GOP governors who say they will reject some portion of the stimulus money.
My first thought? The Republican party is becoming adept at doing the right thing only when it is politically convenient. Own Congress for a decade or so and spend like crazy. Deficit be damned! Lose control of Congress and bemoan out of control spending and the impact of debt on our grandchildren. What do you have to lose at that point?
In the situation before us now we must look back at how states have been interacting with the federal government. Here’s what I said on that topic last year:
You really don’t want to get me started on the federal dollars thing. The states long ago whored out many of their rights to the federal government in exchange for federal money – money taken from citizens of the states. In addition to ceding a great many of their rights, they also open the door for increased federal intrusion into what should be strictly state matters.
Federal money is rarely free. It typically (always?) has strings attached – and the states almost always agree. Did you know that we don’t have an actual national drinking age? In 1984 Congress passed a law requiring each state to make 21 the drinking age or else lose 10% of its federal highway funding. Congress couldn’t set the age limit themselves, but they could use the threat of substantial financial hardship to force the states to comply. Guess what the minimum drinking age is in all 50 states. (That’s a rhetorical question.)
The federal government has the upper hand, of course. They take a great deal of money from individuals and businesses in each state. Then they can turn around and give that same money back with strings attached. The result has been a homogenization of state laws to an extent that was not intended when our country was founded.
I can’t recall a time when a state declined federal money because of the associated requirements. Maybe it happens more than I realize. But I certainly don’t recall a time when a group of governors, united by party affiliation, colluded to reject federal money. It’s heartening to see states finally show some backbone and slow the abdication of their autonomy to an increasingly powerful central government. But the timing of their enlightenment is suspicious.
I don’t doubt that the money comes with unsavory requirements – look who wrote it. I’m sure it contains numerous hooks intended to grow government and increase the power of DC in the affairs of the states. So there is probably just cause to reject portions of it.
Politically how will this play out? I can’t imagine very well. All that the scarcely aware masses will see is that their governor is rejecting “free” money. Once the governors try to explain how there are strings attached those people will glaze over. They don’t care about details. They want their free money. It is a sad testament to the state of the national party that this is the line they’ve had to draw in the sand. They should should have been pushing back against federal strings for years now.
Just a couple of things. Whether one calls the electorate “scarcely aware” or “brainwashed by talk radio”, the implication is that an aristocracy of informed, involved, electors (House of Lords anyone?) is needed and that democracy as it be, is a failure.
Moving onto the unemployment issue, the Alabama Legislature’s majority party could resolve the issue by passing a bill saying part time workers will be covered by the system and appropriating necessary funds. However, posturing (e.g the ethics bills) is much more rewarding and less apt to upset the donor base.
Another alternative would be to federalize unemployment pay, much like we did state old age and disability checks in the 70’s. However, again that takes work, expenditure of political capital and posturing is much easier.
I applaud the Governor for doing this even though he knows the Democrats will demagogue it.
If a guvnah was truly serious about this issue, he would simply order the state comptroller to refuse to remit any tax collections to the feds, then tell BO to pack sand.
Well i think the gov should have taken the money from the stim because all of the people that is losing there jobs is going to need that money to make sure that they will be able to take care of there families that is losing there Jobs , so for all the alabamians that think that it is a good thing that the Gov did not take that money let them lose there jobs and dont have any money comming in i bet they eill think twice about saying it was a good thing that he did not taake the money.
The issue is that the money is not free or found money for the state. Taxes will have to be raised to make this money up when the stimulus goes bye bye or are you thinking there will be another stimulus that will really get things going this time.