Standing Up for Federalism

Harry: I can't believe we drove around all day, and there's not a single job in this town. There is nothing, nada, zip!

Lloyd: Yeah! Unless you want to work 40 hours a week! 

Several Republican governors (and at least one Democrat) are being ripped for saying they plan to refuse to accept hundreds of millions from Obama's "stimulus" bill to pay more unemployment benefits. Why on earth would they turn down all that money when they could use it to help the unemployed? Aren't they just being partisan (with the exception of Phil Bredersen - Democrat from Tennessee)?

They are rejecting the money because in exchange for the temporary funding, they will be required to permanently change their unemployment laws which will increase state taxes on businesses. For example, most states pay unemployment while they try to help you find a job, but you have to be willing to accept a full time job to stay on unemployment. The "stimulus" bill forces state governments to pay unemployment to many more people than they currently do, including to people unwilling to work full time. The bill also requires the state to pay people who quit their jobs because they moved and no longer want to make the commute. 

It's not hard to see that this will mean much higher payroll taxes, which discourages firms from hiring. This expansion of unemployment benefits also encourages people not to work. This is a classic example of how Washington usurps power from local government. They offer money (acquired by taxing the state's citizens) to the states with strings attached. "You can have your this money if you do what we say." Kudos to Bobby Jindal, Haley Barbour, Phil Brederson and others who are standing up for federalism and common sense.