When I first noticed HB 30, Unemployment Insurance Amendments as proposed by Representative Jeremy Peterson (R – Ogden, District 9), I have to admit that I was ready to completely rip into the bill, but after much consideration, I have decided to only point out its many flaws.

The long and short of the bill is that it would reduce the unemployment insurance rate that employers have to kick in to the unemployment fund by two percent, reducing it from the current rate of 9 percent to 7. This bill would expire in 2013, thereby resetting the rate back to 9.

Now, being the pinko commie that I am, I immediately have to ask why we are defunding unemployment insurance at a time when, unfortunately, we are forced to use it? After all, one would not decide to cut their food budget after having a kid.

But then I got hung up on the whole “expires in 2013″ thing.  ”AH,” I so cleverly said to myself, “this is clearly meant to be some sort of program designed to incentivize business to invest.”

Sadly, this logic has some misleading flaws.

Though it is true that businesses would have more money for the year, the expiration date  means that any smart company knows that it should not spend its money on an ongoing expense (read employees). This means that businesses will do one of three things with the extra money they now have: 1)pay for debts already incurred (and, therefore not increase growth); 2) Put the money away in savings to ensure a buffer exists in the event that the company takes a turn (again, not increasing growth); or 3) Put the money into capital investments (i.e. new equipment or a new building).

I must admit that this third option could grow the economy – if this were permanent. The problem is that, once a building is built, a company isn’t going to build another one. Once a machine is ordered, the factory isn’t going to need another. In short, the effects of this bill would be more like a hit of a drug, not a dose of a cure. Some jobs will be created, but this policy would do very little to sustain economic growth.

Meanwhile, what this policy would do is reduce the amount of money people already in need could receive.  I remind you that the unemployed draw from unemployment insurance – not unemployment welfare. Every single person on unemployment is only able to take advantage of the poorly named “benefit” because, at one point, they were paying into the system when they were employed.  Just as you have the right to receive a check from your insurance agent if your car gets in an accident, you have the right to receive a check from the insurance fund in the event you loose your job.

By reducing the buy-in that companies provide, you are naturally reducing the amount of money the insurance provider is able to payout. The safety net people expected to land on becomes just a little bit smaller.

So, if this bill had no expiration date it would be bad because it kicks people when they are down; because it does have an expiration date, it will kick people when they are down (but only for a year), and do little to actually fix the problem.

I think Rep. Peterson thought he was making a good bill on this one, however it just falls flat.

To contact Rep. Peterson, Click Here or call 801-317-5386

Impact: 2

Need: 2

Overall: -1

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