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Government as Farce

The San Diego Union-Tribune, Nov. 29, 2009

$7.4 billion debt in state jobless fund is telling

With depressing regularity, stories emerge out of Sacramento that
provide explicit proof of the striking incompetence of our state's
leaders. Here's the back story on the latest.

In the summer of 2001, Democratic lawmakers and then-Gov. Gray Davis
were pushing for a four-year, 96 percent increase in maximum
unemployment benefits. Republicans strongly objected because they
thought the big increase was unjustified and that the higher taxes
to be imposed on employers to pay for it would be burdensome.

So what happened? Democrats forced through the benefit hike on a
simple majority vote, but the accompanying bill to raise taxes on
employers to fund the boost failed to achieve the necessary
two-thirds support because of GOP objections.

The sheer stinking dumbness of this gets even worse. In 2002, the
state bureaucrats running the jobless benefits program told The
Sacramento Bee this wouldn't be a problem.

Flash-forward seven years. The San Jose Mercury News recently
reported that the never-resolved gap created by the unfunded boost
in benefits had come back to haunt the state in a huge way. The
jobless fund is expected to be $7.4 billion in the red by year's end
and is on track to have an $18.4 billion deficit by the end of 2010,
thanks to a 12.5 percent unemployment rate.

The only reason this enormous problem didn't blow up earlier this
year during budget negotiations was because of an interest-free $4.7
billion loan from the federal government. If the loan isn't repaid
in its entirety by 2011, Washington will charge interest on the huge

We're skeptical that will ever happen, at least if Democrats still
control the House and Nancy Pelosi, D-San Francisco, is still
speaker. Instead, they'll just print more money and continue adding
to the national debt in obscene fashion.

But at some point, we can expect to see a coordinated push for
massive new taxes on state employers to fund the benefits. If these
taxes add a crushing new burden on business that keeps unemployment
sky-high, so be it. We're sure that some state bureaucrats somewhere
will pop up to assure us this won't be a problem.

Call this what it is: government as farce.

Nevertheless, despite the frequency with which we see such stories,
the Sacramento political and media establishment remains resolute in
its belief that the real problem with California is Californians --
you know, the numskull voters who demand services but balk at paying
for them.

As if voters wanted state employees to be among the highest paid in
the nation with pension benefits most Californians would die for. As
if voters wanted the number of workers paid by the state to increase
by nearly 25 percent since 1997. As if voters wanted the state
government to do something as apocalyptically stupid as increasing
unemployment benefits by 96 percent without funding the gigantic

The blame for all these brilliant decisions falls on state leaders
and state leaders alone.

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