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Pat McCrory Meets a Democratic Mess

| February 6, 2013 |

By Rick Martinez, News Director for WPTF Radio and columnist for The News and Observer

Pat McCrory didn’t run for governor intent on cutting unemployment benefits and limiting Medicaid access. But that’s what he might have to do to fix the fiscal and operational messes left behind by his Democratic predecessors.

Folks, there’s no nice way to put this: Democratic leaders such as Govs. Bev Perdue and Mike Easley, Senate President Pro Tem Marc Basnight and House Speaker Joe Hackney either refused to read the state’s balance sheets or were simply asleep at the wheel during their time in office. The problems they left behind in the unemployment insurance and Medicaid programs aren’t the result of the recession. They’re based in systematic neglect.

The unemployment insurance debacle is example one. Officials knew well before the recession that the state didn’t collect enough taxes to cover the increasingly generous unemployment benefits being doled out. When the recession hit, the state borrowed north of $2.4 billion from Uncle Sam.

Now the feds want their money back, and they’re putting the squeeze on North Carolina employers. Federal unemployment taxes are being hiked at the rate of $21 per employee, per year, until the debt is repaid. N.C. Chamber President Lew Ebert cited this increase as a primary reason that private employers added only 60,000 jobs last year when 100,000 were needed to reduce the state’s stubbornly high unemployment rate – the fifth-highest in the country.

The fix is painful but simple: Repay the debt, and the sooner the better. To do that, legislation will land on McCrory’s desk probably this week that increases employer taxes and reduces benefits, including paring back the maximum payment to $350 per week. There’s a lot of grousing about that, but in my book, $350 is still too high. It’s 20 percent more than a minimum wage job.

It’s a mistake to look at minimum wage jobs with scorn. I’ve had plenty. They’re often the entry to higher paid positions, and the skills learned can even lead to new careers. We shouldn’t deprive the unemployed the opportunity provided by any job, including those that pay minimum wage, by making it advantageous to stay economically unproductive.

By reducing benefits and refusing to accept extended federal benefits (after state payments expire), the state will repay that federal debt quicker. That’s when the positive economic dominos fall. Money employers had used to pay higher federal unemployment taxes will be free up for jobs, the solution to unemployment.

For McCrory, this isn’t a quick and easy political narrative, but it solves a long-standing problem left behind by Democrats.

Then there’s the Medicaid trouble McCrory and the Republicans are stuck with. Last year the General Assembly asked our straight-talking Democratic State Auditor Beth Wood to look into the program. She found a managerial nightmare. Problems include bureaucrats not following the law (with regard to drug rebates due the federal government) and ineffectual budgeting practices that resulted in double-digit overruns in each of the past three years.

Wood also discovered the Medicaid division’s compiling and presentation of data is so bad that legislators and state budget analysts found them practically useless.

Medicaid mismanagement has very real consequences for you and me. North Carolina has the highest annual Medicaid delivery cost, $6,098 per patient, in its eight-state region. Georgia delivers Medicaid at a cost of $3,979 per patient. The national average is $5,535. It simply doesn’t make sense to expand Medicaid in North Carolina under Obamacare until these fundamental problems are corrected.

Progressive advocates claim the tough fixes prescribed for the unemployment insurance program, and the ones I hope are coming for Medicaid, are a case of GOP ideology trumping need. Wrong. Taxpayers who foot the bill deserve competently run programs, and beneficiaries deserve the compassion that comes from being well served.

If progressives persist in their criticism of McCrory and the Republicans for holding the line on these important safety net programs, they must also be intellectually honest enough to ask their Democratic friends: “How could you leave such a mess?”

Contributing columnist Rick Martinez (rickjmartinez2@gmail.com ) is news director at WPTF, NC News Network and SGRToday.com