House Majority Whip Jim Clyburn challenges Louisiana Governor Bobby Jindal

H-329, The Capitol • Washington, DC •

February 24, 2009


FOR IMMEDIATE RELEASE


CLYBURN CALLS JINDAL’S BLUFF, HIGHLIGHTS HYPOCRISY

WASHINGTON, DC—House Majority Whip and Katrina Taskforce Chairman James E. Clyburn today challenged Louisiana Governor Bobby Jindal’s recent criticisms of the American Recovery and Reinvestment Act.

“It seems to me like Governor Jindal is bluffing. The incentives in the economic recovery package to help states cover more unemployed workers will not cause states to increase taxes. In fact, it would do the opposite—the American Recovery and Reinvestment Act provides a much-needed cash infusion for severely depleted state unemployment trust funds and helps states avoid triggering mandatory tax increases.

“In the wake of a natural disaster after Hurricane Katrina devastated the Gulf Coast in 2005, then-Congressman Jindal cosponsored and supported legislation to expand unemployment benefits and inject federal dollars into Louisiana’s unemployment trust fund. Yet today in the face of a financial disaster and record unemployment, he opposes similar action under the American Recovery and Reinvestment Act. What changed?

“What’s most alarming to me is that Governor Jindal would deny Louisianans federal unemployment benefits and other job-creating assistance from the American Recovery and Reinvestment Act and at the same time request $5-6 billion in federal funds to continue rebuilding the Gulf Coast. As Chairman of the Katrina Taskforce, I am deeply committed to helping the people of the Gulf Coast restore their communities devastated by Hurricane Katrina. But what benefit is rebuilding a levee if the people in its shadow live in poverty with no job and no means to put food on the table for their families?

“Funding to provide unemployment assistance and save or create 3.5 million jobs nationwide shouldn’t be hamstrung by a governor’s political ideologies or presidential aspirations. That’s why there is a provision in the law to allow state legislatures to draw down funding under the American Recovery and Reinvestment Act by concurrent resolution if their governor doesn’t act within 45 days. I’ve spoken to legislative leaders from South Carolina, Louisiana and Mississippi whose constituents are in desperate need of fiscal stimulus—these leaders don’t plan to leave any money on the table.”



BACKGROUND

Unemployment Assistance helps avoid tax hikes

There are currently 500,000 unemployed workers nationwide—mostly low-wage workers, women and part-time workers—who are falling through the cracks of unemployment insurance programs due to outdated eligibility rules even though their employer has paid into the system on their behalf. More than half the states over the past decade have taken major steps to modernize and address inequities in their programs in order to cover those workers. The American Recovery and Reinvestment Act provides $7 billion in immediate funding for states to update their systems at a time when unemployment rates are breaking records every month and unemployment trust funds are running low. On average, the funding received by the states for Unemployment Insurance Modernization Assistance would cover at least seven years of expanded unemployment benefits. The National Employment Law Project estimates that the Unemployment Insurance Modernization Assistance will prevent tax hikes in key states like Louisiana, South Carolina, Texas and Mississippi.

Economists across the spectrum agree that unemployment benefits are one of the most effective forms of stimulus. Mark Zandi, former economic advisor to Sen. John McCain’s campaign, estimates that for every $1 invested in unemployment benefit assistance; $1.64 in economic activity is generated.

Congressman Jindal vs. Governor Jindal

In 2005, after Hurricane Katrina devastated the Louisiana coast, then-Congressman Jindal cosponsored and voted for legislation to expand unemployment benefits and inject federal funding in Louisiana’s Unemployment benefit trust fund:

PUBLIC LAW 109–72—SEPT. 23, 2005
PUBLIC LAW 109–91—OCT. 20, 2005
HR 4438, passed by the House Dec 22, 2005 (109th Congress)
Yet in the face of the worst economic crisis since World War II, now Governor Jindal wants to deny the people of Louisiana desperately needed unemployment benefits.

Economic Recovery Dollars vs Katrina Recovery Dollars

To date, the federal government has delivered $242 billion in federal aid to rebuild Gulf Coast communities following Hurricane Katrina. The State plans to request an additional $5-6 billion in block grants to continue hurricane recovery efforts.

Working around Governors who refuse funding

The American Recovery and Reinvestment Act included a provision which allows State Legislatures by concurrent resolution to draw down federal funding if the governor does not act on the funding within 45 days. The legislative language states:

SEC. 1607. ADDITIONAL FUNDING DISTRIBUTION AND ASSURANCE OF APPROPRIATE USE OF FUNDS.

(a) Certification by Governor- Not later than 45 days after the date of enactment of this Act, for funds provided to any State or agency thereof, the Governor of the State shall certify that:

(i) the State will request and use funds provided by the Act; and

(ii) the funds will be used to create jobs and promote economic growth.

(b) Acceptance by State Legislature- If funds provided to any State in any division of this Act are not accepted for use by the Governor, then acceptance by the State legislature, by means of the adoption of a concurrent resolution, shall be sufficient to provide funding to such State.

(c) Distribution- After the adoption of a State legislature's concurrent resolution, funding to the State will be for distribution to local governments, councils of government, public entities, and public-private entities within the State either by formula or at the State's discretion.