Louisiana Governor Bobby Jindal rejects $90 million of Stimulus Bill for the Unemployed

When President Obama signed the Economic Recovery and Reinvestment Act last week, it included three different provisions to benefit unemployed workers. The first provided funding to states that allowed for a $25 per week increase in benefits. The second extended the Emergency Unemployment Compensation (EUC) program which gives 20 weeks of federally-funded unemployment benefits to individuals “who had already collected all regular state benefits,” while the third provision widened the pool of people eligible to receive unemployment benefits.

Today, however, Louisiana Governor Bobby Jindal announced his intention to oppose changing state law to allow his Lousiana citizens to qualify for the second two unemployment provisions. Jindal said the state would only be accepting money to increase the unemployment insurance payments for those who currently qualify for unemployment insurance.

In all, Jindal turned away nearly $100 million in federal aid for his state’s unemployed residents. Further, as the National Employment Law Project projected on Febuary 13, EUC extension alone would have benefited 24,981 Louisiana residents. Jindal justified his decision by claiming that expanding unemployment benefits would result in tax increases for businesses. In a press release, the governor’s office explained:

The Governor said the state will not use a portion of the stimulus package that requires the state to change its law to expand unemployment insurance (UI) coverage to qualify for up to $32.8 million of the federal stimulus funding because it ultimately would result in a tax increase on Louisiana businesses.

But it is not clear why participating in the expanded unemployment insurance program would result in tax increases for business. By Jindal’s own estimate, the recovery package would have funded his state’s unemployment expansion for three years, at which point the state could — if it chose to do so — phase out the program.

As New Orleans Mayor Ray Nagin suggested earlier today, perhaps Jindal’s presidential ambitions are “clouding” his judgement. “I think he’s been tapped as the up-and-coming Republican to petition a run for president the next time it goes around. So he has a certain vernacular, and a certain way he needs to talk right now,” Nagin said.