# Question about part of the Stimulus **URL:** \ **Category:** Great Debates\ **Created:** [February 23, 2009, 1:44pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044 "2009-02-23T13:44:43Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![BarnOwl](https://avatars.discourse-cdn.com/v4/letter/b/e95f7d/32.png) [@BarnOwl](https://boards.straightdope.com/u/BarnOwl)\ **Post date:** [February 23, 2009, 1:44pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/1 "2009-02-23T13:44:43Z")
Direct quote from one of the GOP Governors who appeared on CNN this morning: “If we were to take the unemployment reform package that they have, it would cause us to raise taxes on unemployment when the money runs out, and the money will run out in a couple of years and we’ll have to raise the unemployment insurance tax which is literally a tax on unemployment.” I think Bobby Jindal and other Republican guvs have expressed similar sentiments. Is this as direful as the GOP would have us believe? Just a smokescreen? Or is there a practical workaround? ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [February 23, 2009, 2:04pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/2 "2009-02-23T14:04:16Z")
Ultimately what is happening is a large expenditure of money on a stimulus package ON TOP OF a large expenditure of money to save Fanny Mae ON TOP OF a large expenditure of money (TBA) to save the banks. The critical part of the economy, the reason businesses are floundering, is the inability to borrow money. The financial health of banks is unknown at this point and will certainly require another trip to someone else’s well for additional money/debt. Enter China stage left and United Arab Emirates stage right. ---
**Author:** ![BarnOwl](https://avatars.discourse-cdn.com/v4/letter/b/e95f7d/32.png) [@BarnOwl](https://boards.straightdope.com/u/BarnOwl)\ **Post date:** [February 23, 2009, 2:27pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/3 "2009-02-23T14:27:13Z")
> [@Magiver](#): > > Ultimately what is happening is a large expenditure of money on a stimulus package ON TOP OF a large expenditure of money to save Fanny Mae ON TOP OF a large expenditure of money (TBA) to save the banks. > > The critical part of the economy, the reason businesses are floundering, is the inability to borrow money. The financial health of banks is unknown at this point and will certainly require another trip to someone else’s well for additional money/debt. Enter China stage left and United Arab Emirates stage right. I understand that, but you haven’t addressed the question (s) raised in the OP. And I say this respectfully. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [February 24, 2009, 3:04am UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/4 "2009-02-24T03:04:26Z")
Is this as dire as they say? No, I would say [worse](http://www.reuters.com/article/businessNews/idUSTRE51K0A920090221?feedType=RSS&feedName=businessNews&rpc=23&sp=true). I was watching an interview with Rahm Emanual 3 weeks ago and he came out and said the banking system instability was the number one problem. He also said that currently we don’t know the extent of the problem. If I understood what he was saying it involved the way derivatives were valued (or not valued) on the books of financial institutions and that nobody knows the value of the losses. This isn’t a US problem, this is a world problem and it’s big. ---
**Author:** ![Captain\_Carrot](https://avatars.discourse-cdn.com/v4/letter/c/f0a364/32.png) [@Captain\_Carrot](https://boards.straightdope.com/u/Captain_Carrot)\ **Post date:** [February 24, 2009, 3:26am UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/5 "2009-02-24T03:26:39Z")
Fine, but that still doesn’t address the OP. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [February 24, 2009, 3:51am UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/6 "2009-02-24T03:51:05Z")
> [@Captain\_Carrot](#): > > Fine, but that still doesn’t address the OP. I already addressed the seriousness of it. Is there a work around to fix it? Spend less money on pork and use that for unemployment. It’s pointless to spend stimulus debt if businesses can’t access their normal lines of credit. I think we’re screwed so it’s a matter of being the least screwed. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [February 24, 2009, 4:05am UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/7 "2009-02-24T04:05:21Z")
If unemployment insurance in the U.S. is like it is in Canada, it’s supposed to be self-financed (i.e. the tax you pay pays for the benefits that come out). Just like Social Security or a pension fund is supposed to be self-financing. If that’s the case, then the point they are making is that cutting the unemployment insurance tax will make the program insolvent and require that it be subsidized out of general revenues, or they’ll have to raise the unemployment tax even higher to pay back the shortfall. ---
**Author:** ![BarnOwl](https://avatars.discourse-cdn.com/v4/letter/b/e95f7d/32.png) [@BarnOwl](https://boards.straightdope.com/u/BarnOwl)\ **Post date:** [February 24, 2009, 12:41pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/8 "2009-02-24T12:41:26Z")
> [@Sam\_Stone](#): > > If unemployment insurance in the U.S. is like it is in Canada, it’s supposed to be self-financed (i.e. the tax you pay pays for the benefits that come out). Just like Social Security or a pension fund is supposed to be self-financing. If that’s the case, then the point they are making is that cutting the unemployment insurance tax will make the program insolvent and require that it be subsidized out of general revenues, or they’ll have to raise the unemployment tax even higher to pay back the shortfall. The Guv I quoted in the OP said that the money would run out in a couple of years and the tax would have to be increased. How bad would that be - the increased tax? Could we live with it? ---
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [February 24, 2009, 6:28pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/9 "2009-02-24T18:28:02Z")
The governors are basically saying that the state money comes with strings attached. In order to get the money states would have to lengthen unemployment benefits. But, when the federal money dries up, the states will be obligated to keep these programs at the levels mandated by the feds. This money will have to come from increased taxes in those states. I think some of the governors are concerned about the influence the feds are trying to exert on the states. I don’t see a way around this if the money is accepted by a state. ---
**Author:** ![spazattak](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@spazattak](https://boards.straightdope.com/u/spazattak)\ **Post date:** [February 24, 2009, 6:53pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/10 "2009-02-24T18:53:19Z")
> [@Sam\_Stone](#): > > If unemployment insurance in the U.S. is like it is in Canada, it’s supposed to be self-financed (i.e. the tax you pay pays for the benefits that come out). Just like Social Security or a pension fund is supposed to be self-financing. If that’s the case, then the point they are making is that cutting the unemployment insurance tax will make the program insolvent and require that it be subsidized out of general revenues, or they’ll have to raise the unemployment tax even higher to pay back the shortfall. Why couldn’t they just roll back the unemployment benefits to the pre-stimulus levels when the funds run out in 3 years? This is supposed to be a temporary jolt, right? ---
**Author:** ![Burton](https://avatars.discourse-cdn.com/v4/letter/b/8e7dd6/32.png) [@Burton](https://boards.straightdope.com/u/Burton)\ **Post date:** [February 24, 2009, 7:01pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/11 "2009-02-24T19:01:13Z")
> [@yorick73](#): > > The governors are basically saying that the state money comes with strings attached. In order to get the money states would have to lengthen unemployment benefits. But, when the federal money dries up, the states will be obligated to keep these programs at the levels mandated by the feds. This money will have to come from increased taxes in those states. > > I think some of the governors are concerned about the influence the feds are trying to exert on the states. I don’t see a way around this if the money is accepted by a state. Its understandable that they could be concerned about that if its really so. ---
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [February 24, 2009, 7:02pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/12 "2009-02-24T19:02:06Z")
> [@spazattak](#): > > Why couldn’t they just roll back the unemployment benefits to the pre-stimulus levels when the funds run out in 3 years? This is supposed to be a temporary jolt, right? Well, it is supposed to be temporary but this provisions specifically states that the change in unemployment benefits will be permanent. This is probably a power grab by the feds to increase benefit time and normalize benefits between states. ---
**Author:** ![spazattak](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@spazattak](https://boards.straightdope.com/u/spazattak)\ **Post date:** [February 24, 2009, 7:56pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/13 "2009-02-24T19:56:29Z")
> [@yorick73](#): > > Well, it is supposed to be temporary but this provisions specifically states that the change in unemployment benefits will be permanent. This is probably a power grab by the feds to increase benefit time and normalize benefits between states. Do you have a cite for this? How do the feds gain by normalizing unemployment benefits? How is that a power-grab? ---
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [February 24, 2009, 8:12pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/14 "2009-02-24T20:12:46Z")
> [@spazattak](#): > > Do you have a cite for this? How do the feds gain by normalizing unemployment benefits? How is that a power-grab? Here is one quick link that states it is permanent. > **[Stimulus Widens Unemployment Coverage](https://www.newser.com/story/47219/stimulus-widens-unemployment-coverage.html)** > > Part-timers would be eligible; plan expands health-care options It appears that the governors are considering refusing only this portion of the stimulus money. This is a power grab by basically allowing the federal government to dictate how states deal with state unemployment insurance. The standards are different state to state (I believe this is correct…haven’t looked it up) ---
**Author:** ![spazattak](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@spazattak](https://boards.straightdope.com/u/spazattak)\ **Post date:** [February 24, 2009, 10:09pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/15 "2009-02-24T22:09:43Z")
> [@yorick73](#): > > Here is one quick link that states it is permanent. > [Stimulus Widens Unemployment Coverage](http://www.newser.com/story/47219/stimulus-widens-unemployment-coverage.html) > > It appears that the governors are considering refusing only this portion of the stimulus money. This is a power grab by basically allowing the federal government to dictate how states deal with state unemployment insurance. The standards are different state to state (I believe this is correct…haven’t looked it up) Here’s the pertinent quote from the WSJ article: > [@](#): > > \*Obama aides defended the proposals that have drawn the most fire. The unemployment insurance program would entice states to make changes recommended by a bipartisan commission in 1994. Fewer than half of the unemployed currently receive unemployment benefits, either because they work part time or because outdated regulations don’t define them as having been working recently. Many states use older wage data to establish work histories and exclude the most recent three to five months of employment when determining eligibility. > > The changes sought by Mr. Obama would ultimately be financed by employer contributions to the unemployment insurance system, not by federal taxpayers, Obama aides said.\* How does this equate to a power grab? It appears to be a carrot to get improved unemployment benefits in some states that are lagging. Has anyone stumbled on any numbers for this? What kind of discrepancies are we talking about in the funding from the old to the proposed? I haven’t seen any specifics yet, but I’ll keep looking. ---
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [February 25, 2009, 5:03pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/16 "2009-02-25T17:03:35Z")
> [@spazattak](#): > > How does this equate to a power grab? It appears to be a carrot to get improved unemployment benefits in some states that are lagging. The feds want to dictate who gets state unemployment benefits, how much, and for how long. My understanding is that these are state programs over which the fed doesn’t have much say. Seems like they want more control and expansion of the system. ---
**Author:** ![BarnOwl](https://avatars.discourse-cdn.com/v4/letter/b/e95f7d/32.png) [@BarnOwl](https://boards.straightdope.com/u/BarnOwl)\ **Post date:** [February 25, 2009, 5:41pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/17 "2009-02-25T17:41:47Z")
It would sem the pubbie Govenors don’t have a leg o stand on when it comes to rejecting any part of the Stimulus Package. According to Senator Schumer, no Governor can pick and choose from the package. [http://www.talkingpointsmemo.com/archives/2009/02/schumer\_to\_gop\_govs\_take\_it\_or\_leave\_it.php](http://www.talkingpointsmemo.com/archives/2009/02/schumer_to_gop_govs_take_it_or_leave_it.php) In a letter dated yesterday to Director Orszag, Schumer said: As you know, Section 1607(a) of the economic recovery legislation provides that the Governor of each state must certify a request for stimulus funds before any money can flow. No language in this provision, however, permits the governor to selectively adopt some components of the bill while rejecting others. To allow such picking and choosing would, in effect, empower the governors with a line-item veto authority that President Obama himself did not possess at the time he signed the legislation. It would also undermine the overall success of the bill, as the components most singled out for criticism by these governors are among the most productive measures in terms of stimulating the economy. If this position is unassailable, Jindal and his ilk are forked, I should think. Curiously enough, Chuck Schumer was on Cable TV late yesterday afternoon to mention this, and I wonder if this was the first the Pubbies heard of it. ---
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [February 26, 2009, 6:07pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/18 "2009-02-26T18:07:41Z")
It looks like two Dem governors are also considering refusing some of the bailout money…TN and NH ---
**Author:** ![BarnOwl](https://avatars.discourse-cdn.com/v4/letter/b/e95f7d/32.png) [@BarnOwl](https://boards.straightdope.com/u/BarnOwl)\ **Post date:** [February 26, 2009, 6:31pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/19 "2009-02-26T18:31:54Z")
> [@yorick73](#): > > It looks like two Dem governors are also considering refusing some of the bailout money…TN and NH Where did you learn of this,\*\* yorick\*\*? In view of what I posted immediatley above your post, I’m beginning to wonder if Schumer’s pronouncement about no a la carte is true. If there’s no wiggle room for partial refusals, why are the the Governors opining on the matter? ---
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [March 2, 2009, 5:14pm UTC](https://boards.straightdope.com/t/question-about-part-of-the-stimulus/487044/20 "2009-03-02T17:14:55Z")
> [@BarnOwl](#): > > Where did you learn of this,\*\* yorick\*\*? > > In view of what I posted immediatley above your post, I’m beginning to wonder if Schumer’s pronouncement about no a la carte is true. > > If there’s no wiggle room for partial refusals, why are the the Governors opining on the matter? Here is the link for TN Gov. [http://blogs.wsj.com/washwire/2009/02/24/tennessees-democratic-governor-weighs-rejecting-stimulus-funds/](http://blogs.wsj.com/washwire/2009/02/24/tennessees-democratic-governor-weighs-rejecting-stimulus-funds/) I’m wondering the same thing. It appears the states want the money with no strings attached and the feds are saying “take it all, with strings, or take nothing”. I don’t know if a state can only take part of the money…it will be interesting to see how this plays out.