Article by Erik Smith. Published on Thursday, February 12, 2011 EST.

Final Deal Boosts Benefits $25 a Week for Nine Months

Lawmakers milled about on the House floor during the two-hour standoff.

By Erik Smith

Staff writer/ Washington State Wire

OLYMPIA, Feb. 9.—House Speaker Frank Chopp was staring defeat in the face Wednesday when 10 Democrats announced they would vote with Republicans on the year’s big unemployment bill.
           He threatened to adjourn instead, Republicans said. And for two hours lawmakers played a delicate game of brinksmanship, with a critical tax break for business and benefits for thousands of workers hanging in the balance.
           Just when it looked like everything was going to fall apart, the astounding happened. Lawmakers struck a deal and found a way out, and they managed to settle an argument that has dominated the Washington Legislature during the first four weeks of the 2011 session.
           The deal boosts unemployment benefits for unemployed Washington workers by $25 a week for nine months starting in March. A critical tax break for business is saved, and so are unemployment benefits for thousands of workers that otherwise would have ended this spring. The Senate is expected to approve the measure on Friday.

           Had there been no deal Wednesday morning, it is likely that no unemployment bill would have passed the Legislature this year. Business would have faced a crippling average 36 percent increase in unemployment taxes, and some 70,000 of the state’s longest-term jobless would have been cut off from extended unemployment benefits. Wednesday’s battle capped weeks of legislative wrangling, but in the end everything came through.

            “It certainly is a messy process, isn’t it?” said Washington State Labor Council President Jeff Johnson.

            Faced a Deadline

            The fight involved a complex bit of gamesmanship between Republicans and Democrats, and also between business and labor.

            There was no controversy about the tax break or the extended benefits. A minor tweak to state law was needed so that the state can continue accepting federal money for the long-term unemployed. The fight was about something else – a plan to expand state unemployment benefits permanently. By expanding the benefits, the state qualifies for a one-time grant of $98 million from the federal government. Business groups, the governor, Republicans and centrist Democrats favored a plan to provide unemployment benefits to workers who are in retraining programs. Labor wanted a twice-as-expensive benefit for unemployed workers who have dependent children.

            The dispute threw everything in doubt. The Senate last week passed a bill that favored the business position. Labor worked its allies in the House and insisted that everything be resolved before anything moved forward. And state officials said a bill had to land on the governor’s desk by Feb. 8 so that new tax bills could be printed up and mailed to businesses across the state.

            Lawmakers missed the mark by a day, but state officials say they can deal with it. The tax break reduces this year’s rate increase to about 5 percent. It is worth $300 million.

            Ten Democrats Side With Republicans

            Democratic leaders came up with an alternate plan that satisfied their allies in labor: Pass the retraining benefit, but take most of that $98 million and distribute it to the state’s unemployed. That would have boosted benefits by $25 a week through the end of the year.  

            Republicans said the Democrats were spending too much. They were willing to go along with a boost in benefits, but only through Oct. 2.

            They prepared an amendment, and the most important detail was this. Ten Democrats signed it.

            It was even sponsored by a Democrat – Jeff Morris of Mt. Vernon.

            Democrats hold the majority in the state House, 56-42. But ten defections meant the leadership would have been defeated if the bill came to a vote.

That’s when, as House Republican Leader Richard DeBolt put it, “the wheels fell off the bus.”

            Two Hours of Feudin’ and Fightin’

            For two hours, lawmakers met behind closed doors, one party and then the other. Members milled about on the floor. Republicans stayed near their desks, worried that Democrats might abruptly move to adjourn. “We were told we going to adjourn,” DeBolt said. Republicans said they weren’t going to give in without a fight. 

            But before war on the floor could break out, they settled. The extra $25 will be paid out from March 6 to Nov. 6.

            “I don’t think this is an agreement that anybody really wanted,” said state Rep. Cary Condotta, R-Wenatchee, the Republican lead in the negotiations. “Both sides had issues with it, but it is probably an agreement that everybody needed, and I think that is more important today.”

            House Bill 1091 passed the House 98-0.

            Easy Approval Expected

            The measure is expected to win easy approval in the Senate. Republican and Democratic leaders said they were just glad something passed. Senate Labor Chairwoman Jeanne Kohl-Welles, D-Seattle, said, “This looks like it’s going to be a real win for us, so I am optimistic as I can be that we will pass House Bill 1091, like they passed it, unanimously.”

            Senate Minority Leader Mike Hewitt, R-Walla Walla, said Senate Republicans will support the measure as well.

            State Sen. Janea Holmquist Newbry, R-Moses Lake, the Senate Republican lead on the issue, called the settlement a victory for the Legislature’s “philosophical majority.”

            The Real Issue

            Even labor’s Democratic supporters acknowledged that the original labor plan wasn’t a horribly workable idea. If the state started handing out extra money to workers who had kids, it would have cost plenty for the Employment Security Department to revamp its computer system and start checking childrens’ birth certificates. “I would have preferred that it go to children, but it was a technical difficulty for them,” said House Labor Chairman Mike Sells, D-Everett. “So labor said to us, yeah, it’s easier just to do it across the board.”           

The trouble Wednesday was that the alternate solution carried a big price tag. By boosting benefits through Jan. 1, 2012, the state would have exhausted the whole $98 million in just one year.

By cutting off the benefits in November, the money lasts two years.

When the money runs out, the permanent retraining benefit will boost business tax rates slightly.

            Interest Groups Satisfied

            Business interests weren’t whooping with joy, but said the deal was worth it in order to get the tax break.

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