Senate Dems offer changes to GOP’s jobless bill-WEB ONLY

Outnumbered Democrats in the Indiana Senate were unsuccessful yesterday in trying to make major changes to a GOP plan designed to fix the state’s bankrupt unemployment fund.

The Republican plan would increase taxes on employers, reduce benefits for most jobless people and tighten eligibility standards. Senate Democrats offered amendments that would keep benefit payments the same and expand eligibility to get nearly $150 million in federal stimulus money. Republicans rejected the changes.

The Democrat plan would do little to quickly eliminate the deficit in the fund. The system has been paying out hundreds of millions of dollars more in benefits than it has been collecting in employer taxes, and the state has borrowed more than $500 million from the federal government to keep the fund solvent.

Senate Democrats, outnumbered 33-17, said they were given no input into drafting the Senate Republican plan so they offered amendments to let their stances be known when the bill is taken up in conference committee negotiations.

Senate Minority Leader Vi Simpson (D-Bloomington) said it took a long time for the fund to go bankrupt and it will take a long time to correct the problem. But cutting benefits was not right, she said.

“When we are right in the middle of a big recession, we need to be investing in our communities and helping families provide the necessities of life, not taking money out of their pocket,” she said.

Senate Republicans defended their plan.

“The opportunities we look to do represented a balance on employers and employees and reform within the system,” said Senate Tax Chairman Brandt Hershman (R-Wheatfield).

Under the current system, employers pay between 1.1 percent and 5.6 percent annually on the first $7,000 of an employee’s income. Those with a history of laying off workers pay higher rates.

The Senate Republican plan would raise the maximum rate to 8.2 percent. The taxable wage base would be increased from $7,000 to $10,000.

Under the plan, weekly benefits would be paid on a sliding scale that would decline the longer a jobless person is in the system.

The maximum benefit of $390 would be increased to $424 for the first four weeks but eventually drop to $310 in weeks eight through 26. Only those eligible for the maximum $390 benefit would see a temporary increase.

Democrats have criticized that component of the bill, saying it is unfair to lower-paid workers who lose their jobs.

They said benefits for people on state-paid unemployment for a maximum of 26 weeks would decline from about 15 percent to as much 27 percent, depending on the benefit level.

“Those huge cuts in benefits – that may be where the Senate Republicans want to start the conversation in conference committee. We don’t,” Simpson said. “We wanted to draw a line in the sand and say we are going to be part of this conference committee.”

Hershman said benefits would not be cut if the jobless take part in training approved by the state, but Democrats suggested that money was lacking to provide training to very many people.

Senate Democrats proposed raising the taxable wage base from $7,000 to $10,500 – or $500 higher than the Republican plan. It was voted down.

They also offered an amendment that would expand eligibility for benefits to receive $148.5 million in federal stimulus money. Republican Gov. Mitch Daniels and Senate Republican leaders have said that is a bad deal for Indiana because it would require permanent expansions in eligibility, but the federal dollars to pay for them would run out in two years.

“This would dramatically expand who would be eligible,” Hershman said. “The requirement for expanding the benefits would be in perpetuity.”

Republicans accepted one amendment that could temporarily extend unemployment benefits for seven weeks, to be funded by the federal government, if the state changes the way it calculates its unemployment rate.