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Romney Once Raised Business Taxes To Pay For Unemployment Benefits He Now Wants To Privatize

By Marie Diamond on November 23, 2011 at 4:00 pm

"Romney Once Raised Business Taxes To Pay For Unemployment Benefits He Now Wants To Privatize"

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Despite their unwillingness to raise taxes one penny on millionaires and billionaires, Republicans have stubbornly refused to extend unemployment benefits and the payroll tax break that middle class families depend on in these difficult times.

GOP presidential frontrunner Mitt Romney has dutifully toed the party line. In a USA Today op-ed opposing the extension, Romney argued that the central problem was that “unemployment benefits, despite a web of regulations, actually serve to discourage some individuals from taking jobs…”

Yet Huffington Post reports that when he was governor of Massachusetts in 2003, Romney actually supported a “huge increase” in business taxes to pay for unemployment benefits:

Facing a depleted unemployment insurance trust fund upon entering the Massachusetts governor’s office in 2003, Mitt Romney proposed a $260 million tax increase on employers as part of a plan that included comprehensive benefit reforms. [...]

[T]he willingness to sign off on an agreement that involved even those tax hikes also reflected a type of political pragmatism that few Republicans would show today. “There’s still going to be a huge increase,” Romney told The Patriot Ledger’s editorial board at the time, acknowledging that his plan would also include a tax hike. [...]

Indeed, two years after making that initial proposal, Romney had presidential ambitions and had shifted to a more conservative plank, calling for tax cuts for employers as part of comprehensive unemployment insurance reform. Six years later, second-time presidential candidate Romney has gone even further, suggesting the privatization of the program.

Romney’s evolution on the issue is yet another example of his willingness to ditch any previously held position to pander to the conservative base. When asked at a debate whether he would support an extension of unemployment insurance benefits set to expire at the end of the year, Romney said he favored privatizing benefits. In short, Romney believes workers should pay for their own unemployment benefits.

Suzy Khimm at the Washington Post points out “Americans are heavily dependent on UI benefits because there are no jobs to be found, not because they’re not motivated enough to find them. Currently, there are 4.5 job seekers for every open job — and that ratio is worse in areas with high unemployment.”

The system Romney proposes would disadvantage low-wage workers who have “have more trouble building up funds in their accounts on a regular basis, particularly in a climate of economic instability.” He would also nix the protection workers have that requires employers who lay off large numbers of people to pay a higher payroll insurance tax.

Additionally, Romney refuses to back an extension of the payroll tax breaks everyone who gets a paycheck is receiving this year — apparently the one tax hike he is willing to support. Yesterday President Obama once again challenged Congress to extend and expand the tax cut, in the spirit of the holiday season. He noted that if Republicans vote no, middle class families will have to pay an additional $1,000 in taxes next year.

“If your members of Congress aren’t listening, you’ve got to send them a message,” Obama said. “Tell them, don’t be a Grinch.”

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