Unemployment remains political football in NC

By GARY D. ROBERTSON, Associated Press

RALEIGH, N.C. ? The subpoenaed chief of the state unemployment benefits office found herself Wednesday in an uncomfortable spot before a General Assembly committee ? talking to legislators about billions owned to the federal government and how jobless data is shared with the governor.

Assistant Commerce Secretary Lynn Holmes was grilled for more than an hour under oath. The subpoena was issued after she didn't attend a Revenue Laws Study Committee meeting last month. Holmes attributed her absence to a miscommunication.

Holmes defended the Division of Employment Security and its predecessor agency she also led over whether they reacted soon enough or strongly enough in raising concerns to lawmakers about why business taxes paid to the unemployment fund weren't keeping up with benefits. The Unemployment Insurance Trust Fund became insolvent in early 2009, and the state now owes $2.6 billion to the federal government to make up the difference.

GOP lawmakers on the panel also asked Holmes about protocol for giving embargoed unemployment data to Democratic Gov. Beverly Perdue's office before it is released.

The back and forth over unemployment ? the state's current jobless rate of 10 percent still sits above the national average ? is not surprising given the upcoming election year. North Carolina shapes up as hotly contested territory in elections from president and governor to Congress and the General Assembly. Unemployment will be a big campaign issue, said Jack Fleer, an emeritus professor at Wake Forest University who has specialized in congressional and legislative politics.

"I think each side is looking for whatever advantage it can get in both shaping the public's understanding of the level of unemployment and the causes of unemployment," Fleer said in an interview. "I'm not surprised that each side is seeking some kind of benefit in dealing with this very serious state and national issue."

Republican legislative leaders continued Wednesday to argue the unemployment office should have done more to sound the alarm about the debt, which is already requiring higher unemployment insurance taxes and almost assuredly will mean more for some in the years ahead. Holmes, who was originally appointed to the job by Perdue in early 2010, provided a list of eight occasions over 14 months in which she or her agency's staff made presentations to the legislative or executive branches about challenges with the trust fund.

"I think we've done a good job," Holmes said after the meeting. "I think we could do more, but I think we did let a lot to legislators know."

Sen. Bob Rucho, R-Mecklenburg, a committee co-chairman and frequent critic of Holmes, said more should have been done, particularly when Democrats were in charge of the Legislature until last year. An outside study on the trust fund challenges is now pending.

"The crux of the matter is that 2009 was the insolvency and nothing was done from that period forward," Rucho said. "That's not a good way to run a business and very simply that is why we're sitting in the $2.6 billion hole."

Legislators questioned what Holmes knew about what she says is a common practice of state unemployment agency officials sharing with the governor's office embargoed information about the unemployment rate before it's released to the public.

Perdue's office acknowledged this week that the governor spoke about an increase in the rate in an appearance before the Asheville Rotary Club in mid-August the day before state jobless information was released to the public.

The Division of Employment Security has an agreement with the U.S. Bureau of Labor Statistics ? which assembles the unemployment data ? that limits when the information is released. Commerce Department spokesman Tim Crowley said the federal agency was alerted to Perdue's comment the next day.

"There were no sanctions, penalties or repercussions of any kind from this event, which occurred nearly five months ago," Perdue Press Secretary Chris Mackey wrote in an email.

Carolina Journal, which is published by the conservative-leaning John Locke Foundation, reported last month about other emails between workers in the state unemployment office and Perdue's press office discussing how the news release announcing how the monthly employment data should be worded.

Those emails prompted U.S. Rep. John Kline, R-Minn., chairman of the House Committee on Education and the Workforce, to write to Perdue asking for documents and correspondence "to ensure BLS data is not being shared prior to the authorized release date."

Congress has implemented strong penalties to deter and punish early release of the data, wrote Kline, who wanted the documents by Wednesday. Kline's office declined comment, referring questions by The Associated Press to the letter.

Mackey said Perdue's office has told Kline's staff it would need a few additional days to comply.

The press secretary suggested partisanship in the flap, pointing out it was a "Republican chairman" who sent the letter and that Republicans in Washington and Raleigh should focus on "putting people back to work and stopping the extreme education cuts."

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Associated Press writer Emery P. Dalesio in Raleigh contributed to this report.

Copyright 2012 by The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Source: http://www.wral.com/news/political/story/10560530/

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