Wednesday, Oct. 21, 2009

Scoppe: There's plenty of blame to go around for jobless benefits blunder

IT'S DIFFICULT to comprehend the combination of incompetence, passive-aggressive hostility and political dysfunction that allowed the Legislature to go home this spring without making a simple, no-cost-to-South Carolinians change to state law that would have allowed more than 30,000 laid-off South Carolinians to receive up to 20 additional weeks of unemployment benefits.

To borrow a tired cliche, we have a system of government that was guaranteed to fail in the perfect storm of an agency director who was under fire and didn't bother raising the alarm, a Legislature that was too busy playing political games to do anything once a lobbyist raised the issue and a governor who had so muddied the waters and created so much anger that the unemployed - whom he had been using as pawns since last fall - got lost in the shuffle.

The most direct blame goes to Ted Halley, the embattled director of the state Employment Security Commission who received numerous warnings from the U.S. Labor Department that state law needed to be changed to ensure laid-off workers could receive extended benefits under the federal stimulus law but didn't bother mentioning it to the Legislature because, he told The Post and Courier's Katy Stech, the information already was in the stimulus bill. That explanation is reminiscent of his response when pressed earlier this year on why he and his agency hadn't been more aggressive about letting the Legislature know that the trust fund that pays unemployment benefits was running out of money. In subsequent interviews, Mr. Halley has said he didn't think South Carolina's jobless rate would ever get so high that the state would need to use the federal government's alternative formula - sort of like he didn't think our jobless rate would get high enough last year that the state would have to borrow money from the federal government to keep paying out benefits.

At the risk of crossing the line from political analysis into psychoanalysis, it looks like the director, already taking heat from every direction and trying desperately to fight off threats by the governor to fire him and the Legislature to make it easy for the governor to do that, allowed the boulder on his shoulder to get in the way of doing his job of looking out for the jobless. On the day news of this bungle broke, Mr. Halley, who previously had announced he would retire at the end of the year, moved that date up to Nov. 8.

It's unclear how much blame should go to Mr. Halley's three bosses, the three former legislators who hold full-time, no-qualifications-required jobs as Employment Security commissioners, but clearly they are not blameless. One of them, former Rep. Becky Richardson, says Mr. Halley never told the commissioners about the potential problem; but Mr. Halley told The Associated Press' Jim Davenport that a decision about whether to ask the Legislature to act "is never made without consulting commissioners."

If the commissioners knew about the problem and did nothing to make sure the Legislature was keyed in on it, then they are even more to blame than Mr. Halley. If they didn't know - if Mr. Halley never told them - that suggests a problem with the relationship between Mr. Halley and his bosses, which surely would have been apparent before this, and which raises questions about their ability to oversee the agency. In either case, this points to why, absent a strong reason to do so (which is lacking here), it's dangerous to put a group of people who cannot be fired if they bungle their jobs (the commissioners) in direct or indirect control of a state agency.

Despite Mr. Halley's inaction, though, legislators were informed of the problem, but they did nothing about it, and here's where we get into the complicated business of allocating blame between a Legislature that didn't do its job and a governor who was throwing out enough distractions and poison to make that job much more complicated than it should have been.

Recall that the governor enraged the Legislature by holding laid-off workers hostage rather than immediately requesting a federal loan when the ESC ran out of money to pay jobless benefits last year. He spent much of last fall and the early part of this year locked in battle with the agency over some matters where he clearly was right, some where the agency clearly was right and some where it was just not possible to find anyone in a white hat. Legislative leaders decried his tactics but pledged to address his legitimate concerns, and set about trying to do that, or at least look like they were.

Meantime, the Congress passed the massive stimulus package that would send $700 million to South Carolina to help keep the economy from shutting down - if the governor would request the money. Mr. Sanford refused, and lawmakers spent much of the legislative session trying to figure out how to get around him, finally having to get a Supreme Court order to force the governor to obey a state law that they passed requiring him to request the money.

It was against his backdrop that Mr. Halley declined to tell the Legislature about the problem with the law and an attorney for a legal aid group for the poor started talking to legislators. One of those, Rep. Kenny Bingham, agreed immediately that the state needed to tweak state law to address the problem, and he incorporated the change into his bill to give the governor more control over the ESC.

Now, most people had expected this bill to pass at least the House, but in an uprising of anger toward the governor, representatives defeated it, some saying openly that they were punishing Mr. Sanford. It was a petulant move made all the more outrageous by what we know now: Mr. Bingham had made clear to the House that the unemployed stood to lose out on seven weeks (since then increased to 20) of federal benefits without the tweak contained in the bill. He told me that the ESC commissioners were lobbying so hard against the bill, and passions were running so high, that he doesn't think most representatives were paying enough attention to realize what he was saying. It was near the end of the session, and neither he nor anyone else tried to address the issue through any other bill, as should have been done.

Some legislators have said they misunderstood the situation, apparently confusing it with another jobless extension that Mr. Sanford had been making a big deal about refusing because it required the state to 1) make its laws more generous permanently and 2) put up a state match. In fact, this provision did neither.

Clearly, Mr. Sanford's antics made it easier for this essential technical change to get lost in the shuffle. But that doesn't absolve legislators, who managed to ignore the distractions and deal with lots of other issues last year. It's hard to imagine that they would have been so oblivious if such a dire warning about the need to make a technical change to state law had come from a lobbyist for, say, the real estate industry or the trial lawyers or the medical profession - from just about anyone, for that matter, other than a lobbyist for poor people.

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