House votes down $125 million in U.S. stimulus funds

Republican lawmakers yesterday narrowly blocked a proposal by Gov. Timothy M. Kaine to boost jobless pay for thousands of Virginians idled by the recession, possibly handing Democrats a potent issue for the approaching gubernatorial and legislative elections.

The GOP-controlled House of Delegates voted 53-46 to turn down $125 million to finance expanded unemployment benefits from President Barack Obama's economic-stimulus package. Virginia becomes one of the first states to reject such aid.

"I just can't imagine why we would leave $125 million . . . on the table," an angry and red-faced Kaine told legislative leaders in a conference room adjacent to his office at the Capitol.

"This was not about [saying no to] the federal government. This was not about an ideological battle with some distant foe. This is about looking into the eyes of Virginians who have lost their jobs."

With 300,000 Virginians out of work and the jobless rate approaching 7 percent, the federal funds would have extended benefits to unemployed part-time workers and those not working but training for other positions.

House Republicans and business groups said the proposed changes in state law would have left mandates on businesses in place after the federal stimulus money is gone.

"This is a defining moment," said House Minority Leader Ward L. Armstrong, D-Henry, alluding to the potential appeal of the benefits issue as a vote-turner in November contests for governor and the House. "But this is not a fork in the road when you choose business on one side and employees on the other side."

Democrats are angling for a third straight gubernatorial win and hope to take back the House, the last redoubt of Republican power at the Capitol. The GOP has a six-seat majority.

Republicans acknowledged hard economic times, but -- echoing objections from the business lobby that heavily finances candidates in both parties -- said the measure ultimately could push up the operating costs of business. They said that could happen, in particular, by triggering higher taxes to keep solvent the fund from which jobless checks are drawn.

Del. Christopher B. Saxman, R-Staunton, said his family-run bottled-water business has lost 500 accounts in the past six months and has had to dismiss veteran employees. But he urged the House to defy Washington, saying, "It is very difficult to do more work when you tax me more."

The House vote was almost entirely along party lines. Fifty-two Republicans, joined by one Democrat, Joseph P. Johnson Jr. of Washington County, opposed the Kaine measure. Daniel W. Marshall III and Donald W. Merricks, Republicans from Danville and Pittsylvania County in hard-pressed Southside Virginia -- where unemployment in some areas hovers around 20 percent -- joined 44 Democrats in backing Kaine.

Today Kaine is scheduled to visit Martinsville, where the February unemployment rate was 20.2 percent.

The Virginia Senate, with a slender Democratic majority, had sided with the governor on a 21-19 vote.

Senate Minority Leader Thomas K. Norment Jr. of James City County, whose district includes Williamsburg, a tourist destination with a 19.5 percent unemployment rate, said the Kaine measure could discourage the jobless from returning to work by freeing them to reject positions they deemed unappealing.

"This is absolutely ludicrous," Norment said. "It is a disincentive."

Kaine, a political confidante of Obama, who picked him to run the Democratic National Committee, prevailed on two other job-related measures, both temporary in their duration: a 13-week extension of jobless pay; and protections for the health insurance of some laid-off part-time employees.

Those initiatives, backed by Republicans and favored by the corporate and professional community, will be bankrolled by stimulus funds.