Niki Kelly has an article about testimony in the Senate yesterday with respect to fixing the unemployment fund. Apparently there was a good deal of focus by small business owners on abuses in the system. I suspect abuses are a small fraction of the cost, but anecdotally I can say the system has its flaws with employees terminated through their own fault being awarded unemployment benefits. Employers have to sustain a high burden of proof before an Administrative Law Judge will uphold denial of a terminated employee’s benefits. I guess that is a valid policy choice, but perhaps one that should be revisited in light of the shortfall. Other testimony suggested that some businesses use the unemployment system as part of their business plan with seasonal layoffs. Those employers might reasonably be expected to pay more into the system for the luxury of keeping a chunk of their workforce effectively on call.

But, really, I expect that the fundamental problem of too many people receiving too many benefits on the strength of too little money paid into the fund won’t be fixed by working around the edges. Employers will have to pay more and former employees will probably have to take less. Obviously the best solution would be to have fewer unemployed people. Maybe they can legislate that.

Mary Beth Schneider, writing for the Indianapolis Star, reports on a political game of chicken in the House that stalled passage of a bill to do something about the state’s empty unemployment benefits fund. The solution lies in increasing the inputs and/or decreasing the outputs — i.e. making businesses pay more, making unemployed take less, or some combination thereof. None of that is very popular. Democrats weren’t willing to pass the bill on their own without significant Republican support as cover. They didn’t want to get hammered for raising taxes or cutting benefits. House Republicans were unwilling to go along or unwilling to go along in sufficient numbers.

Given the divided control of House and Senate, a bipartisan solution would be necessary in any case. The Governor is apparently not providing much in the way of leadership on this issue. So now it will be up to the Senate to take charge. Everyone knows something needs to get done. Currently the fund is operating on a federal loan. Governing is hard.