Heart of the River hosts Protest Paddle


By Jessica Wray

Despite a proposal from President Barack Obama that would

allow states extra time to replenish their unemployment insurance funds,

Indiana Republicans say the state should push ahead with its own solution.

A GOP-backed measure that cuts unemployment benefits in an

effort to pay back a $2 billion dollar federal loan (House Bill 1450) has passed the Indiana

House of Representatives, and it cleared a Senate committee Thursday.

Gov. Mitch Daniels told reporters Thursday afternoon that he

is skeptical of Obama's proposed plan.

"I'm very pleased with what the General Assembly is doing,"

Daniels said, according to The Evansville Courier & Press. "They've got a

very good compromise program, and it's real. I know it's real. And it will

address our problems. So we ought to just move straight ahead with it."

Through the bill, businesses would pay about three-quarters

of the money they would have paid under a different fix passed two years ago. Cuts

in unemployment benefits would make up the other quarter.

Proponents say they think that will replenish the state's

fund and pay down the federal loan by 2020.

Sen. Karen Tallian (D-Portage)

thought that the time period should be stretched out further to eliminate

increased financial pressures on employers. She also criticized the benefits cuts.

The bill would reduce average weekly benefits from about $283 to $220.

"We have said that we need to be able to pay off the

indebtedness, and including covering the interest by 2020," said Mark Everson,

Indiana Department of Administration commissioner. "We can't just string this

forever. That's a long period of time as it is."

Rep. Dan Leonard (R-Huntington) said in a hearing that the

bill he authored would decrease the weekly average, but increase benefits for

some. He said it would be determined on an individual basis, based on a

person's yearly income — a change from previous plans that looked at quarterly

pay periods. Leonard said that the new plan would make the benefits more equal.

But Democratic committee members argued that lowering the

weekly average could cause an increase in the number of people eligible for

federally funded benefits, like food stamps.

The committee passed the bill with an 8-4 vote.

The Obama administration will propose its budget

recommendation on Monday, part of which is a plan that would cancel a series of

business tax increases set for the next two years. The tax increases would cost

employers $21 per worker annually, costing Indiana businesses about $80 million

a year.

Another part of the plan would allow states to tax more. It

would more than double the taxable wage base — employers would go from paying taxes

on the first $7,000 of individual employee salaries to $15,000 — but it would

also cut the unemployment tax rate in half. The federal government would not

stand to gain from the change.

Indiana lawmakers are not alone. Legislators in other states,

like Florida, are pushing for their own solutions to the unemployment benefits


The above is one of an ongoing series of reports from the Indiana Statehouse by students at the Franklin College Pulliam School of Journalism.


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