Indiana Senate Republicans pass jobless bill-WEB ONLY

A plan that would cut benefits to most jobless people to help fix Indiana’s bankrupt unemployment insurance fund moved to the House – and a showdown with majority Democrats.

The Senate passed a Republican plan yesterday that is designed to make the fund solvent. It was approved on a mostly party-line 30-20 vote in the GOP-controlled chamber and sent to the House, where Democrats have some major problems with it.

House Speaker Patrick Bauer (D-South Bend) said he would quickly send the bill to a joint House-Senate conference committee, adding that “we don’t think you should cut benefits on people who are devastated by losing their jobs because of this economy.”

Senate Republicans say their plan is a balanced approach to fixing a system that has been paying out hundreds of millions of dollars more in jobless benefits than it has been collecting in employer taxes. The fund has borrowed more than $560 million from the federal government to remain solvent, an amount that could reach $1.2 billion by year’s end.

The plan would increase taxes on employers, with higher rates on those who rely heavily on the fund; reduce benefits for most unemployed claimants; and tighten eligibility standards. Senate Republicans say it would make the fund solvent by the end of 2011. Then the state would begin repaying its federal loans and ultimately build up a sufficient surplus.

“We are asking everybody to participate in fixing the system, especially those who use the system the most,” said Senate Tax Chairman Brandt Hershman (R-Wheatfield).

Senate Minority Leader Vi Simpson (D-Bloomington) said any solution would require a delicate balance, but Senate Democrats had several concerns about the bill, including a reduction in benefits during a recession.

A bill drafted by House Democrats, which failed to pass because of partisan squabbles, would have increased taxes on employers but would not have cut benefits.

Senate President Pro Tem David Long (R-Fort Wayne) said Senate Republican staff and some top senators “have broken their backs” to get a bill ready for early conference committee talks. The regular session must adjourn by April 29, but Bauer and Long have said the unemployment issue could force lawmakers into overtime.

“We now face five weeks of tough negotiations,” Long said in a prepared statement. “That is where the give and take of ideas and potential solutions between all four caucuses will take place. That is where we will all have to work together to get a bill passed. So it’s time to put aside the rhetoric, and the finger pointing, and get to work.”

Republican Gov. Mitch Daniels has called the Senate Republican plan an excellent approach that would begin to fix the system. House Minority Leader Brian Bosma (R-Indianapolis) has said it was a good starting point that included some elements that his caucus have sought.

Bauer said he would do all he could to expedite a conference committee. But he said a major sticking point could be the proposed benefit cuts by Senate Republicans.

“So we will work to get something done, but certainly we don’t want to punish people,” Bauer said.