Shields slams O’Bannon on unemployment funds

There’s been a lot coming out of the Tom Shields campaign of late. Shields is challenging incumbent Republican John O’Bannon in the 73rd House district.

Recently, Governor Tim Kaine has asked the federal government for a $252 million loan to cover unemployment costs. Recall, if you will, that as part of the stimulus package, Virginia was eligible to receive an additional $125 million in funds. That money would have been used to expand unemployment coverage, but the House, under Republican control, voted against it, despite the fact that it was clear that the coverage could be repealed when the money ran out.

Now we (as a small business owner who pays unemployment taxes on behalf of my employees, I’m in that bunch) are looking at higher unemployment rates to cover this loan. The governor, in announcing the loan package said:

If Virginia maintains an outstanding federal loan on the first day of two consecutive calendar years, as is expected in 2010 and 2011, Virginia employers will be assessed an additional federal tax of $21 per employee beginning in 2011. If Virginia had been eligible for the second tranche of assistance from the ARRA, approximately $125 million, the state’s compensation fund might have been able to delay requesting loans until after January 1, 2010, which would have delayed the additional federal tax until 2012.

O’Bannon voted against taking the money and Shields properly called him out on it in this NPR interview.

The party of NO ends up costing Virginia employers money.  We’ve got to get some of those folks out of there. Electing Tom Shields would be a great step.

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14 thoughts on “Shields slams O’Bannon on unemployment funds

  1. Vivian

    Surprised to see you making this argument. You should know better than most that the $125 million came with a corresponding increase in the size of the pool that would have eaten up that money. Had VA taken the money, we’d still be $252 million in the hole for the present pool and the pool going forward would have been expanded by tens of thousands of new part time workers with no new funds to cover them once the initial influx was spent.

    The simple fact is that the $125 million would NOT have plugged this hole. This hole is solely due to Kaine/Wagner once again underestimating the economic downturn and ignoring the warnings coming from the Rs.

  2. Actually, I disagree, which is why I included the quote from the governor. He said that taking the $125 million would have delayed the need to borrow the money for a whole year.

    And your argument on “no new funds to cover them” simply doesn’t hold up: all that needed to be done was to repeal the law covering them and there would be no additional costs. And don’t tell me that it couldn’t be repealed: your guys are in charge. If they didn’t repeal, it would be on them.

    As for “underestimating the economic downturn,” pray tell: what estimates are provided to the Virginia Employment Commission by Kaine/Warner? The VEC employs their own economists and sets their own rates.

    1. “…all that needed to be done was to repeal the law covering them…”

      So, all that needed to be done was to accept the agreement in bad faith.

    2. So are you saying that you would have supported a repeal of the expanded pool back to pre-stimulus levels after the money ran out?

      If the Democratic controlled Senate and the Governor would have agreed to a bill with an automatic 2 year sunset clause in it, then maybe the bill would have passed.

      On a side note, it’s funny to hear a Democrat say “your guys are in charge.” When did this happen? When did Tim Kaine become a Republican? When did the Senate fall under Republican control?

      As for Kaine saying it would have kept them solvent for another year, I guess we’ll just have to take his word for it. My guess is that it may have plugged part of the hole by using the entire 2nd year of the stimulus funds now which would have been a disaster next year. Heck, even if they’d applied the entire $125 million and not expanded the pool by a single person (something the Feds wouldn’t have allowed), we’d still be insolvent by $127 million.

      1. So are you saying that you would have supported a repeal of the expanded pool back to pre-stimulus levels after the money ran out?

        Yes.

        If the Democratic controlled Senate and the Governor would have agreed to a bill with an automatic 2 year sunset clause in it, then maybe the bill would have passed.

        I don’t recall such a bill being offered.

        You guys are in charge of the House. A D governor and Senate can’t pass a bill by themselves.

        1. Frankly, I didn’t follow the technicalities of the bill closely enough at the time so I’m not sure if such a bill would have even met the Federal mandate. If it would have, then I would think the Governor, one of the 21 Democratic Senators or 40+ Democratic House members would have proposed it.

          As for your last comment, apparently you didn’t realize I was responding to your assertion that “our guys were in charge” so they could just pass a bill. As you astutely noted, the single body controlled by the Rs has no such power.

          My point is, had a bill with a sunset clause been on the table, I would have championed it loudly, regardless of what “my party” did. Since that bill wasn’t out there and our option seemed to be a massive new unfunded mandate, I was proud of the Rs who made the very difficult political decision to turn it down. Frankly, I think the new shortfall proves they were right(although you obviously think the opposite is true).

          Still waiting for someone to explain to me how $125 million over 2 years with an expanded pool could have covered a $252 million one year shortfall without an expanded pool.

          1. The way I recall it, there was no issue with the bill being repealed after the 2 years. I don’t recall any discussion of a sunset provision – and a quick look back through the various articles posted on PilotOnline shows no such discussion.

            I realized what you were referring to. Your guys in the House killed the bill, so yes, your control of the single body is the reason why the money was not accepted.

            And it’s really BS that it was a “massive new unfunded mandate” since it was clear prior to the vote that repealing the provision after the money ran out was allowed. I cannot locate the article right now, but I remember clearly that this question was asked of the Federal Government and answered in the affirmative.

            The only thing that kept the Rs from voting in favor was that they didn’t trust that a repeal was going to happen in two years, when the money ran out.

            You acknowledged earlier that you’ll have to take the governor’s word that the fund wouldn’t have run out of money now, as opposed to a year from now. No one is making the claim that accepting the money would have wiped out the entire shortfall; please don’t try to say that anyone is.

  3. The argument from the Republicans, was that they’d have to “change the law” in order to take the money. Last time I checked, that is what a legislator gets paid to do. Unless of course you on the finance committee then ODU will supliment your income.

    That was the central argument at the time. Republican legislators didn’t want to be bothered with “changing the law”. It was just too much of a burden on them, and lets face it, those “unemployed” are mainly democrats anyways!

    1. It wasn’t that the process of changing the law was too hard. It was that the entire unemployment model had to be restructured to allow in tens of thousands of new recipients without any guarantee of funds to cover them.

      Once the money ran out, we’d have had a hugely expanded pool, no money to cover them and no guarantee that a reversion would occur. Maybe if the bill had contained an automatic sunset clause progress could have been made but the unwillingness to include such a clause is proof positive that the intention was to change the system forever.

      1. That is flat out not true. It was clear at the time that the money was only for two years and that the law expanding coverage could be repealed. To say that there was no “guarantee of funds to cover them” is disingenuous.

        1. Vivian

          You’re too good to throw out words like “disingenuous.” I’m just trying to have an honest discussion. If anything “disingenuous” has been said it is the assertion that this money WOULD have helped when the best Kaine can even say is it MIGHT have helped.

          Let’s be honest, the Democrats in the Senate could’ve passed a bill with a sunset provision. It was their bill. Their refusal to do so amounted to a guarantee that they wouldn’t agree to a rewrite 2 years later. Otherwise a sunset would’ve obviously been included. Since it was clear the newly expanded pool wasn’t going anywhere, the Rs were forced to do what they did.

          In the end, THANK GOD they did. If they hadn’t, the fund would still be insolvent, the pool would be significantly larger and the Feds wouldn’t be there to bail us out again.

          1. Be honest? You said yourself that you didn’t know “if such a bill would have even met the Federal mandate.” What we DO know is that no such bill was offered.

            Now you’ve made the leap that the fact that no bill was offered meant that the bill would not have been repealed when the money ran out. What a leap!

            First you trust the governor’s statement, then you don’t.

            How could the pool be larger if the money came from the fed to pay those additional benefits?

            And how do you know that the Feds wouldn’t be available for a loan?

            I’m trying to have a reasonable conversation as well but it’s hard when you are contradicting yourself.

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