Gov. Whitmer vetoes GOP push to end $300 federal jobless benefit

Lansing — Michigan Gov. Gretchen Whitmer vetoed Tuesday a Republican proposal that attempted to opt the state out of federal unemployment programs that bring an additional $300 weekly benefit for those who lost their jobs during the COVID-19 pandemic.

The Democratic governor's rejection of the bill brought disappointment for GOP lawmakers who saw the measure as a way to boost the state's workforce. But officials in Lansing hope to continue broader discussions about changing the state's unemployment system.

In a letter explaining her veto, Whitmer said she is "open to discontinuing" the enhanced benefit early if the Legislature "swiftly allocates" federal funding for childcare and raises the regular unemployment benefit to match neighboring states.

However, Whitmer said because the current bill failed to garner the required two-thirds support in the GOP-controlled Legislature to take effect immediately, it was moot. Without immediate effect, it wouldn't have and impact until 2022. Also, she said the legislation violated federal law by ending the payment of the enhanced benefit without the required notice of 30 days.

"Moreover, ending these enhanced UI (unemployment insurance) benefits on July 31, as proposed by HB 4434, would drain $1.5 billion from our economy — money that will instead flow into our local economies and support small businesses," Whitmer said. 

The federal programs are currently set to end Sept. 4. At least 25 states have already set early ends to the extended unemployment benefits, according to the nonpartisan state House Fiscal Agency.

Republicans have contended the proposal is needed to encourage residents to rejoin the workforce as state restrictions on gatherings and masks have lifted and coronavirus infection rates have declined. The $300 addition to unemployment benefits meant recipients could get up to $662, "an incentive for many to stay on unemployment," state Rep. Beth Griffin, R-Mattawan, said in a statement last month.

Sen. Ken Horn, R-Frankenmuth, chairman of the Senate Economic Development and Small Business Development Committee, said he wasn't surprised by the veto because of the problem with the effective date.

But Horn said there are businesses in his district that have changed their hours, schedules and menus to deal with their struggle to find workers.

"They are changing the way they do business based on not having enough employees," Horn said.

Earlier this summer, Republican lawmakers, state business groups and Whitmer's office discussed a potential plan to lift the federal enhancement early, increase the normal unemployment benefit in Michigan and allocate more funds to the state's unemployment trust fund, which pays unemployment benefits.

Those negotiations ultimately failed, but Horn said he's still open to increasing the state's maximum weekly unemployment benefit from $362 to $422, which he described as about the average of Midwestern states, and increasing the payment per-dependent from $6 to $20.

"That is really going to depend on the amount of money that the governor agrees to put into the trust fund," Horn said.

Brad Williams, vice president of government relations at the Detroit Regional Chamber, said his organization was disappointed the negotiations hadn't worked out previously.

The state's labor shortage is a "multi-layered issue," Williams said, with unemployment benefits, safety concerns and access to childcare all playing a role.

"There are many tools that we need to deploy to get people back into the workforce," Williams said.

But Michigan Rising Action, a conservative group, slammed Whitmer's veto on Tuesday.

"Whitmer crippled small businesses with her excessive COVID restrictions and shutdowns, and vetoing this bill and continuing Michigan’s labor shortage is tantamount to kicking them while they’re down," said Eric Ventimiglia, executive director for Michigan Rising Action.

The Michigan AFL-CIO previously labeled the proposal a "stunt" in a statement, noting that it wouldn't take effect until March 2022 because the Senate's vote on giving the bill a quicker effective date failed.

cmauger@detroitnews.com