McCrory says feds should have acted on unemployment
Posted July 8, 2013
Updated July 9, 2013
Raleigh, N.C. — Gov. Pat McCrory said it was Democrats in Washington, D.C., who failed to avert a change that removed benefits for 72,000 unemployed North Carolina workers.
"Our goal is to get people back to work in North Carolina," McCrory told reporters Monday. He brought up the issue as part of review of his first six months in office.
Earlier this year, North Carolina changed the duration and generosity of state benefits. That, in turn, triggered federal provisions that ended federally funded long-term unemployment benefits, which up until July 1 provided help for those out of work longer than 26 weeks.
North Carolina is the only state in the nation to trigger this provision.
"The debt we owe the federal government, last I checked, has not been forgiven by the administration in Washington. Nor has the waiver been accepted that we requested many months ago," McCrory said. "The waiver was not accepted by the Obama administration and, had it been, we most likely would be extending unemployment.
"Since it wasn't, it was an issue that we had to make a decision. Do we stay in increasing our debt at a rate we couldn't afford, or do we cut in half the credit card? I think we ought to cut in half the credit card, with the goal of solving the debt on small businesses ... and working to get people back to work," McCrory said.
That outline of the unemployment situation is problematic for several reasons:
The Debt: The state of North Carolina did not, and does not, owe the debt. That money was borrowed to pay unemployment claims, but it is owed by the state's employers. Businesses pushed state lawmakers to make changes to the unemployment program because they did not like seeing their per-employee costs go up. But many employers paid little or no state unemployment insurance through the 1990s and the 2000s. That left North Carolina with a smaller reserve fund than needed when the recent recession hit. Some lawmakers have discussed issuing bonds to repay the debt, which State Treasurer Janet Cowell has discouraged specifically because North Carolina would be taking over the liability it doesn't currently owe.
Forgiveness: McCrory suggested that the Obama administration could forgive some or all of the debt accumulated to pay reinsurance claims. That prerogative actually rests with Congress, which has the power to appropriate money. McCrory spokeswoman Kim Genardo acknowledged that McCrory misspoke on this point. However, she pointed out that North Carolina's federal delegation had not acted on this matter. Earlier this year, Republican legislative leaders called on U.S. Sen. Kay Hagan, a Democrat, to prevail on her party's leaders in the Senate to grant North Carolina an exemption from the trigger law. But they did not ask her to forgive the debt.
Grandfathering: As noted, House Speaker Thom Tillis and Senate President Pro Tem Phil Berger asked Hagan to help ensure North Carolina was "grandfathered" as a state that could change its unemployment program. Again, McCrory suggested that was something that the Obama administration could do. In reality, Congress grandfathered four states, but the Obama administration could not do it on its own.