The N&O this week offered its critique of President Trump’s executive order offering unemployment aid in a cost-sharing proposal with the states, labeling it a “short term stunt.”
The order would, among other things, provide $300/wk to the unemployed from the Federal government, with states obligated to add in another $100/wk. The move was designed to provide aid to the jobless whose $600/wk federal benefits ran out a couple weeks ago. Currently, the U.S. House and Senate are in a stalemate over another Covid relief package.
The N&O justifiably expresses concern over the administration of the funds:
Distributing federal disaster relief dollars to the jobless will require states to adopt a separate, parallel unemployment program. Although the president says the payments will be retroactive to Aug. 1, creating the program could delay checks for weeks or months.
This indeed could prove problematic, and there is uncertainty over whether the state’s Division of Employment Security, who struggled so much to disperse the first round of relief, is equipped to set up this parallel program and distribute funds in a timely manner.
The N&O makes a valid point here, along with questioning the legality of the order, but they also include some comments that warrant further scrutiny.
First, they dismiss Senate leader Phil Berger’s and House Speaker Tim Moore’s support for Trump’s order because “they radically cut the state’s unemployment insurance program” in 2013. Because of that, it seemed “odd” to the N&O that Berger & Moore would support aid for the unemployed now.
But this is an apples to oranges comparison. In 2013, the state owed billions in debt to the federal government from its unemployment insurance fund. Reforming it allowed much faster repayment, and allowed job creators to avoid billions in taxes over the few years after the reform. These savings greatly improved North Carolina’s labor market, so much so that an academic study in 2014 by the University of Pennsylvania concluded “North Carolina stands out among its neighbors in the improvement in its labor market performance since its unemployment insurance system was reformed.”
What the N&O doesn’t understand is how much the 2013 UI reforms actually did help the unemployed. It helped more of them return to work. As Reagan once said: “The best social program is a job.” Moreover, the situation in 2013 was nothing like today, in which people have been forced out of work due to Gov. Cooper’s forced shutdown.
The N&O then acknowledges that North Carolina has plenty of funds set aside for this program, including $2.9 billion in the unemployment trust fund – thanks to the UI reforms the N&O criticized – and another half billion in unspent CARES Act money. So not only did the 2013 UI reforms help the unemployed in the best way possible – by returning more of them to work – but also helped position North Carolina better to provide needed relief during this pandemic. But don’t expect the N&O to acknowledge this.
Lastly, the N&O expresses concern over the federal source of funding for this program, which Trump pegged as the federal disaster relief fund. The feds would draw from this fund until it reached $25 billion – which would last about four to five weeks by some estimates. Relying on this “fast-dwindling funding source,” is unacceptable according to the N&O. Ironically, however, their recommendation is to extend the $600/wk benefits that recently expired – to be funded entirely by the federal government.
If the N&O is concerned about financing benefits from a “fast dwindling funding source,” do they not know that the federal government is already nearly $27 Trillion in debt? That funding source is way beyond “fast dwindling,” it is completely bankrupt.
But the N&O pays no mind to such fiscal realities when it comes to advocating for programs they support. Just spend now and let the money printing and debt wreak economic havoc for decades to come.
Gov. Cooper has reportedly begun applying for Trump’s federal program, in the event it is ruled constitutional. He has also urged Berger and Moore to consider increasing the duration and maximum benefits of NC’s unemployment insurance benefits – a proposal likely to fall on deaf ears.
The N&O makes valid points questioning the legality and administration of Trump’s order. Unfortunately, however, they also include some commentary that raise questions of their own.
