Legislators’ jobs are to appropriate and legislate, the governor’s job is to administrate.
But lately, Gov. John Bel Edwards does it all with executive orders. Is that smart policy or a political dare to the independent, mostly Republican Legislature?
On Sept. 24, Edwards' Executive Order 129 JBE 2020 suspended the unemployment laws until Oct. 9, 2020, which required reporting the trust fund balance. That balance would have automatically reduced benefits from $247/week to $221/week and increased business unemployment taxes by 30%. That mechanism was proposed by business and labor in 1987 to prevent another trust fund bankruptcy.
A historical overview of the 85-year-old unemployment system, a subject of the special legislative session, forecast problems for its trust fund. Too many people were drawing benefits for too long, not going back to work. Too many businesses were not paying taxes into the trust fund.
Only employers pay taxes into the trust fund and many were closed in the pandemic by the governor and mayors. Less money going in and more money coming out.
Having worked on the solution to problems of the 1980s when Louisiana lost many oil and gas jobs, it felt like déjà vieux all over again. Except this time a pandemic was causing problems across the board instead of in just one industry’s market forces.
One should study and understand what happened in the past before attempting to solve problems today.
Suspending laws was a short-term, knee-jerk reaction, not a solution. Edwards allowed the trust fund to go broke and now Louisiana is borrowing tens of millions from the federal government as some legislators try to increase benefits and dig the hole deeper. How will the loan be repaid?
Let’s get this straight: After closing tens of thousands of businesses, many of which have folded; after forcing hundreds of thousands of workers to stay home, giving them more in unemployment benefits than two-thirds were making before the shutdown; keeping everything closed for many months, not acknowledging that the free money kept the unemployed home longer which drew down the trust fund instead of allowing market forces balance out the supply and demand of labor. Now, in a 30-day special session, all of this is going to get fixed? Probably not.
Maybe JBE has been too busy with COVID-19 and hurricane press conferences to invite business and labor to the table. This $1 billion drawdown of the trust fund didn’t just happen. It’s been going on for seven months, yet neither Gov Edwards nor legislators are attempting to solve the problems. They are all kicking the can down the road when it will be much bigger and more difficult.
The Louisiana Legislature did call itself into special session to solve problems. Maybe a little too ambitious with 70 items in its call, but at least they acted.
State legislators, maybe not a majority yet, want to open the Louisiana economy faster than Edwards and some public health authorities would like. The sooner businesses open and people go back to work, the sooner taxes start replenishing the unemployment trust fund and fewer benefits are drawn out.
An easy move would be a joint resolution by state House and Senate asking Congress to pass another stimulus package with an unemployment federal supplement, limited to doubling a state’s current benefits, until Dec. 31. Not to pass another $600 a week federal supplement as is in Speaker Nancy Pelosi’s Oct.1 stimulus bill.
Louisiana continues to lose population. For a 2020 population of 4.65 million, according to the U.S. Bureau of Labor Statistics, there’s only 1.943 million actually working as of August 2020, leaving 160,600 unemployed (7.6%). Fewer than 42% of Louisiana work.
If JBE and legislators don’t open up the Louisiana economy very soon, more wanna-be-working people will move to Texas and Florida which continue to grow jobs at a record pace. And then how will we pay back the trust fund loan?
After nearly 50 years in politics, I do not believe anything in the executive branch happens by coincidence. Last week JBE announced he’s not fully opening up the economy until Nov. 6, three days after the presidential election, playing national politics with our economy.
That’s no coincidence. Term-limited JBE is just another Democrat trying to help Joe Biden get votes and himself a job in the Biden/Harris administration.
Email Garey Forster at Garey.Forster@gmail.com.