NH Steward

Back to NHSteward.org

Wednesday, June 17, 2009

More on the Stimulus' Unemployment Provisions

One of the most well publicized fights to emerge since the passage of the stimulus has been a few of the nation’s governors protesting the law's unemployment provisions.

As you will remember, the governors were upset because regulations requiring an increase in benefits would result a corresponding business tax increase to offset the costs.

In recent days, however, a new complaint has emerged from the folks who are supposedly benefiting from the increases:
Under the economic recovery plan, laid-off workers have seen a $25 weekly bump in their unemployment checks as part of a broad expansion of benefits for the poor. But the law did not raise the income cap for food stamp eligibility, so the extra money has pushed some people over the limit.

Laid-off workers and state officials are only now realizing the quirk, a consequence of pushing a $787 billion, 400-page bill through Congress and into law in three weeks.

And for people hurt by the change, there's no way around it.

"Everybody tells you, 'Yeah, I can understand why you're frustrated. It doesn't sound right.' But nobody knows where to go," said Mark Milota, 47, of Marietta, Ga., who was laid off in November from his job at a medical billing company. …

Milota said he was told that, without the stimulus money, he would have received about $300 a month in food stamps.
A sneaky way for the Administration to offset the costs of the massive spending package, or simply further proof the legislation was forced through Congress much too quickly and with no concern for unintended consequences?

Safe to assume the latter.

Continuing along this vein, the New York Times Small Business blog has an interesting piece explaining, “How the Stimulus Package Discourages Hiring:”
And now, thanks to the stimulus package, unemployment insurance has been extended as much as an additional 20 weeks. If you’ve had to lay off 10 people, this could easily result in additional taxes of $10,000, $50,000, or even $100,000. It’s a time bomb that won’t go off until after employers get their contribution-rate increase in November, but it will go off.

And therein lies the final irony: Even after the economy improves, I’m going to think long and hard before I hire anyone. Thanks to the stimulus package — the stimulus package — the costs, paperwork, and legal exposure associated with hiring employees is on the rise. I’m not saying the package is all bad, but it does make it less appealing for small businesses to hire more people, or even to offer health insurance, for that matter.
The whole piece is worth a read.


  1. Where were all these "Steward of Prosperity" during the Bush Administration when record spending burned through the budget surpluses of Clinton years????? No one heard from the Republican Congressmen or Senators about reckless spending and greed during the Bush years. This is just politics as usual.

  2. Although Bush era spending was very high, it was not even close to as bad as it is now. That's why it's important now to tell both Republicans and Democrats that we don't want this spending.

    It's sad that Republicans often talk about massive spending but don't do anything about it until we cry loud enough. We need to start yelling loud now and continue to yell even after the changing of the guard in congress.