Democrats, some pundits confused about Jindal refusal

There seems to be confusion not just in the offices of Democrat politicians, but among pundits (and in the press) in understanding just what is the impact of Republican Gov. Bobby Jindal’s rejection of about $98 million of federal funds courtesy of the recently passed federal spending law. Proper understanding of it all is essential to judging Jindal’s intent and motive behind the refusal.

As detailed elsewhere, Jindal refused the funds he said because they could create an enduring additional claim on state funds beyond the next two years when that federal funding ran out. He has hinted elsewhere that philosophical differences about increased business taxation lay at the root of his rejecting, implying additionally a difference in the meaning of unemployment assistance (that it was a backdoor way to undo welfare reform) also was a concern. This is because in order to implement the expanded version of unemployment benefits called for under the bill, which would allow part-timers and some who voluntarily left work and could refuse to look for it to claim benefits, Louisiana law would have to change.

Proving she had not read the bill (meaning being a member of the vast majority in her party before voting for it), Democrat Sen. Mary Landrieu at first said such a legal change could be accomplished by a law with a sunset provision, i.e. with a termination date that would require a new law to continue it. Then she backed away from that misstatement and her office admitted the new law forbade such state responses where a legal change was necessary, but said the state could then repeal a legal change after the money ran out. This is disingenuous; Democrats know once benefits are granted, the constituencies that receive them or who politically profit from them (in this case, liberal Democrats) make it difficult if not impossible to reverse them. Bad for them, Jindal knows it, too.

But some pundits have seized upon another portion of the law to create an erroneous impression of what could happen next. It permits the reception of funds regardless of a governor’s if within 45 days of offer a state legislature votes by concurrent resolution (a majority of each house in Louisiana) to accept it. They mistakenly believe that then the money could be spent for its intended purpose.

This shows a lack of understanding of what the grant system is and its relationship to the law. The grant system is a modified principal-agent system that can get very complicated because federal and/or state laws apply in differing areas, sometimes simultaneously. Typically, the federal government will promise states a certain amount of money if they perform a certain task over which they, not the federal government, have authority. The federal government in these instances cannot create a mandate on states to perform such an action, and this section of the new law is no exception in its language that statutory change of state law must occur for funds to be transferred to it for this purpose (in that transfer is prohibited unless state law allows for its use as intended in the federal law).

And Louisiana law prohibits this use. R.S. 23:1601 appears as the relevant statute, which instructs that benefit ineligibility occurs when someone leaves “employment from a base period or subsequent employer without good cause attributable to a substantial change made to the employment by the employer,” and except for narrowly defined situations unrelated to the new federal law, someone who does not actively seek work on a weekly basis also is ineligible. This law must be changed in order to accept the money.

Laws in Louisiana cannot be changed by concurrent resolutions. The most important distinction is that the governor must sign legislation, or if vetoed this must be overridden by a two-thirds vote of each chamber. Therefore, the legislature could pass as many concurrent resolutions as it wants on the matter, but the federal law itself prohibits the state receiving the money unless the state law itself has changed. This is known by legislators and explains why none have called for such a measure since Jindal announced his refusal.

Yet this understanding eluded the grasp of some writers, which led one who supported Jindal’s move to lament how he could be sidestepped by the Legislature, while another who has been visibly jaundiced against Jindal ever since Jindal became a force to be reckoned with Louisiana politics thundered about how Jindal was using this as a political stunt that would not accomplish anything. Besides the question of grants and the law, neither also correctly understands Jindal’s intent and motive (and further make the questionable assumption that the Legislature would pass this: such a resolution would be favored to get out of the state Senate, but the partisan and ideological composition of the House would make it a crapshoot to succeed there).

That section in the federal law would apply only in the instances where a state already may permit this kind of eligibility (or perhaps where citizen initiative could get it on the books fast enough) that could prevent a governor against the idea from formally rejecting funds if a favorable legislature will go against him. For those states that do not permit this by law, it stands as an incentive to change it. But with his veto power, Jindal’s not going to let it happen in Louisiana.

No, Jindal is not doing this to tilt at windmills and/or accrue political credit from his Republican base. He is doing it because he can and he believes in it. Thankfully, he’s done his homework on this and thereby the state will be better off for his wise decision.