The trust fund helps out-of-works Michiganders stay afloat during the pandemic. These are the leaders undermining it.
LANSING, MI — With enhancements to out-of-work Michiganders again on the verge of expiring, Republicans are introducing legislation to prevent Michigan’s overburdened unemployment system from ensuring its ability to help struggling families.
“The unemployment system in Michigan is disgustingly broken,” Katie Carls, co-owner of Marvelous Maids, told The ’Gander.
Carls was one of more than 300,000 Michiganders who had her unemployment insurance frozen when the state launched an investigation into fraud over the summer, which strained her ability to care for her kids as a single mom. But if the Unemployment Insurance Agency can’t fund itself adequately, that temporary insecurity will become permanent devastation for families like hers.
Proposals Synergize to Destroy the Unemployment Trust Fund
When Michigan’s Unemployment Trust Fund fell below $2.5 billion, an automatic mechanism changed the rate at which employers funded the system. The impact, Bridge reported, could be about $25 dollars per employee. And without that $25 dollars, the trust fund may run out in mid-2021.
But Lansing Republicans are seeking to block that automatic mechanism, calling $25 per employee an unfair burden on businesses. The bill also blames Gov. Gretchen Whitmer’s successful efforts to curb the spread of the deadly coronavirus pandemic for current unemployment figures.
The bill, introduced by Rep. Matt Hall (R-Marshall), says instead the money to restore the unemployment trust fund should come from the federal or state budget. But this policy has some unfortunate synergies with other priorities of Lansing Republicans.
As The ‘Gander reports, Michigan faces a stark budget crisis following the damage the pandemic has wrought on the state’s economy. And state Rep. Ryan Berman (R-Commerce Twp.) has resisted the efforts of Gov. Whitmer to seek federal aid.
“I do not believe the federal government should hand states a blank check and allow bureaucrats to spend your hard-earned money on whatever they want,” said Berman. “I’m not going to pretend state spending cuts won’t likely be needed. The budget picture is bleak. Many of our local businesses were shut down or slowed significantly during COVID-19, which impacts how much the state collects in income and sales taxes.”
Berman supported a bill that would force Michigan to reject any federal financial aid related to shoring the state’s budget up during the coronavirus. That’s a popular platform for Michigan Republicans, with state Sen. Majority Leader Mike Shirkey (R-Clark Lake) implying the state’s budget crisis is just something to endure.
“Some states have crippled their economies, like Michigan, based on the actions taken, and we just need to suffer through it for a cycle or two until the economy gets back on track,” Shirkey said in a recent radio interview.
If Hall’s plan to have the state responsible for the role traditionally played by business in funding unemployment, and Berman and Shirkey are successful in making Michigan suffer through the budget crisis, the Unemployment Trust Fund will not be secure through the next 12 months.
Shifting the Blame Has Been Republican’s Strategy So Far
Rep. Greg Markkanen (R-Hancock) attempted to bash Gov. Whitmer for the failures of the UIA in the early days of the pandemic, but the failings of the UIA that both Carls and Markkanen complained about are actually the result of former Michigan Republican Gov. Rick Snyder.
Snyder-era policies intended to shore up the state’s unemployment trust fund following the 2008 recession were largely to blame for UIA’s failures during the coronavirus pandemic. The error-prone “MIDAS” system Snyder implemented still forms the backbone of UIA’s automated services, which were heavily criticised by Markkanen and others.
Markkanen pinning of the unemployment issues on Gov. Whitmer was a tonal shift from only weeks before, where Markkanen explained the great value of Whitmer’s expansions to programs that helped out-of-work Michiganders.
“While there’s no doubt this is a difficult time for people in our communities, we also must remember that nothing is more important than the health and safety of our families, friends and neighbors,” he wrote in March.
By April, tone changed: “The governor’s orders caused widespread layoffs when businesses were forced to close. Now, those workers are counting on unemployment insurance.”
Besides blaming Gov. Whitmer, Markkanen has been otherwise silent on shoring up unemployment while his party pursues a plan to undermine and potentially bankrupt the system. If the unemployment system fails, though, Markkanen’s rhetoric without action shows a likely political strategy for Lansing Republicans.
Markkanen’s shift toward blaming Gov. Whitmer for Republican-created problems with unemployment could signal the strategy in 2021, where the culmination of Republican policies would bankrupt Michigan’s unemployment trust fund and leave those families Markkanen was concerned about out in the cold.
If that happens, Markkanen’s constituents won’t have any system left to rely on.