By: Mark Glennon*
Less than two weeks ago, JB Pritzker’s administration told us we would soon see a “plan” for addressing the gaping hole in Illinois unemployment trust fund. It’s the source of money for unemployment claims but it is underwater by something well over $5 billion. Most of that hole is in the form of the repayment obligation of about $4.5 billion for money borrowed by the trust fund from the federal government during the pandemic.
Wirepoints and others earlier criticized the state for ignoring the problem and not using earlier federal assistance to fill the hole, which many prudent states have done. In its current budget and future budget projections, Illinois simply pretended that the cost of fixing the problem does not exist.
Interest on the loan was waived until September 6, but it’s now running up, and it’s a big number. Over $100 million of interest will accrue within a year. The interest tab is already nearly $20 million.
Don’t worry, we were told. Deputy Governor Andy Manar went on radio to tell us “the governor’s office will have a plan” to address the trust fund problem. And never mind Wirepoints, Manar said, because it is partisan and not reputable.
Well, on Tuesday we saw the first step to address the problem. Comptroller Susana Mendoza was the lead signatory on a letter sent by officials of seven other states asking the federal government to reinstate the interest waiver. The letter, sent to Treasury Secretary Janet Yellen, argues waiving interest is appropriate because the pandemic is continuing.
“Taxpayers should not be on the hook for interest just because the pandemic is lasting longer than projected,” Illinois Comptroller Susana Mendoza said in her press release, referring to Illinois taxpayers.
What about federal taxpayers, including Illinoisans, whose loan she is asking be made interest-free? No mention of them. Federal money is just manna from heaven, as some people see things.
Most other states have already dealt responsibly with any unemployment trust fund problems that arose from the pandemic. Only ten have loans to their funds from the federal government that remain unpaid; many used earlier federal assistance money for that repayment. Pritzker earlier lied about that, claiming federal rules prohibit that use.
You would think some of those other states would be getting upset over how federal bailout money has gone disproportionately to Democratic states, particularly those who manage their finances poorly. A Wednesday column in the Washington Post has the latest on that. In it, a senior fellow at the American Enterprise Institute summarized detailed research showing that out-sized checks were written to blue state governments.
That is, Democratic states generally got bigger bailouts (and so did smaller states). Most states, he also showed, are awash in federal cash because the bailouts were unnecessarily large. We previously warned about that here.
That pattern is playing out in the new request for the interest waiver on federal loans. The other states signing on Mendoza’s letter were New York, Colorado, Pennsylvania, Connecticut, New Jersey, Massachusetts and Minnesota. California didn’t join on the letter, though its unemployment fund has by far the biggest loan owed the federal government, so it presumably approves of the interest waiver. All those states are heavily Democratic.
For Illinois and some other states, it’s never enough.
There’s more to Illinois’ unemployment trust problem than just interest on the federal loan. The $4.5 billion of principle must be repaid somehow, and a positive balance must be restored that will cost at least another billion. For those items, we’ll have to wait to see the rest of the plan.
*Mark Glennon is founder of Wirepoints.
Read more about Illinois unemployment fund and budget problems:
- Deputy Governor Andy Manar’s Deceitful Response To Wirepoints
- The states’ 2020 financials are in: Biden’s billions in new federal aid aren’t needed
- Governor’s limitless spending habits are wreaking havoc on multiple fronts
- Gov. Pritzker: The man with two budget faces
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
Expect no retraction or apology. This what they do.
If they cut out all the fraud going on they would probably be solvent.
When JB was a boy and only weighed 280,he was used to holding out his fat little hand and asking mommy for more cupcakes,of course she always gave in,so now he holds out his fat little hand and asks Biden for more federal aid,of course he will give in
This is such disgraceful behavior. These Illinois politicians have no dignity to go to the Treasury hat in hand and request forbearance on their loan. It’s dereliction of duty. Enough is enough and federal taxpayers (all of us included) should be outraged. Pay your debts!!!
Another interesting stat I would love to learn: how much of the unemployment funds that were deployed were fraudulent? I would guess $1 billion or more. How was that been remedied?
Don’t hold your breath waiting for a response on the unemployment question – no investigation, no commentary … crickets! That is safely buried under the rug.
Personally I was approved for unemployment benefits, as were several other people who I know. We were all gainfully employed and had never filed for benefits. What a system!
Note: being good citizens we alerted the Unemployment office and did not use our benefit cards – as I’m sure most folks whose names were used to perpetrate the fraud.
Ridiculous.
Heavens forbid jb would have to dip into his $2 billion secret fed relief slush fund to repay borrowed funds. (Sure that $2b has already been, behind the scenes, promised to others.) Also, what ever happened to Kwames report on how much of the borrowed unemplyment funds have been flushed down the toilet to fraud & ides incompetence?
Mark Glennon says: For Illinois and some other states, it’s never enough. Mark, this reminded me immediately of Proverbs 27:20 Death and Destruction are never satisfied, and neither are human eyes. New Living Translation says: Just as Death and Destruction are never satisfied, so human desire is never satisfied. Proverbs: 30:15,16 The horseleech hath two daughters, crying, Give, give. These are three things that are never satisfied, yea, four things say not, It is enough: These are blood sucking leeches. I say this, if you never discipline yourself as a human and you lust for what belongs to others you… Read more »
The Federal Reserve will never demand loan repayments, they will roll over and refinance the debt in perpetuity. Chicago and Illinois never has to pay this back. The rest of the country must pay for this via higher inflation from Fed Reserve forced liquidity.
This particular program is from the Treasury, not the Fed, but I agree that the Treasury would be so inclined, being run by the Woke (at least for now).
Clearly more evidence of how JB is fit to be chief executive…
Have Mendoza do what she does best: Issue a bond to replenish UI then never speak of that bonded debt again.
Shush. They may try that.
They should just declare bankruptcy and walk away from the debt like Trump did many times. Then, go on TV and tell everyone what a great success they are. Seriously though, I’m Not opposed to a bailout as long as it comes with real reforms and the leaders are gone. Why not start a grass roots political movement Mark? One that has a sound economic agenda and leaves that culture war stuff for Fox News. End gerrymandering term limits public financing of campaigns, no private money no PACS, no lobbyist money end pensions and lifetime blue cross for elected officials… Read more »
TRUMP LIVES IN YOUR HEAD. SEEK PROFESSIONAL HELP
Mike Pence is a real man who’s deserving of party support. He stood up under tremendous pressure and refused to throw our election process down the shitter. Why aren’t you supporting him, a real conservative? Brian Kemp stood up to him and instead of being a hero, he’s being primaries? Why does the Republican Party even pay attention to the former loser in Chief? Yes, I’m pissed. I voted straight Republican in 2020, but no way would I ever vote for the pussy grabber. He’s such a lousy candidate I actually voted for Sleepy Joe. Situational ethics and morality of… Read more »
Mike Pence is a total toady or he’d be spilling the beans on Trump big-time. He was thisclose to physical harm triggered mostly by Trump’s constantly despicable rhetoric, yet largely remains the quiet, faithful lacky. What does it take for his brain to put two and two together?
GO EAT A BAG….
Genius
How can you point to Liz Cheney and Adam Kinzinger as examples of people with a moral compass? Liz Cheney never met a war she didn’t like, and Kinzinger saw the gerrymandered writing on the wall.
Nobody with a moral compass gets anywhere in politics today. Nice guys don’t get to the top. Policies are the only rational basis for a vote. The mess we are currently in should prove that.
Fools who think Liz and Adam are ‘good’ or have moral compasses are the same idiot morons 40% of the population who, in 1980, looked at the destruction on the landscape, and said “GIMME ME MORE OF THIS – JIMMY CARTER FOUR MORE YEARS” Jon Howell on WLS the other day was like “THAT ADAM HE’S MY KIND OF GOOD REPUBLICAN”. Jon, your opinion is so bad, you lost your right to participate in society. Those people don’t deserve the right to vote and we should be actively trying to take it away from them. I have no problem taking… Read more »
“Jon, your opinion is so bad, you lost your right to participate in society.”“Those people don’t deserve the right to vote and we should be actively trying to take it away from them.” This pretty much sums up the thoughts of the Trump wing of the party. Well done. At least you are honest about your desire to take away voting rights for anyone that doesn’t agree with your point of view. Sad and pathetic how the party of ideas has been reduced to a party containing so many nut jobs. The left wants to rule with mandates and the… Read more »
“At least you are honest about your desire to take away voting rights for anyone that doesn’t agree with your point of view.” You think this is about different point of views? Hahahha! Let’s just be honest – democracy doesn’t always work. It’s failing miserably in this state and the county. People get too dumb to vote and we take away their rights. The regents of society – none of whom could have ever voted for Biden – get to make these decisions and reset society. And if millions lose the right to vote, too bad. They can rejoin democracy… Read more »
“And if millions lose the right to vote, too bad. They can rejoin democracy when they have views that are worthy of democracy.”
Who decides when their views are “worthy”? You??? You’re not special debtsor. Who are these benevolent people that have our best interest at heart? I guess in the meantime we will have lowlife voters determine our future. The horror.
I don’t see where the right wants to take away voting rights. If you’re referring to voters being required to provide identification, then you’re confusing voters’ rights with vote integrity.
If I want to do just about anything I have to have valid ID – proof that I am who I claim to be.
Improved voting integrity would go a long way in restoring faith in our voting system.
Rob, we have our list of reforms that we write about routinely and we promote them in the best way we know. They include some of yours. Some of your others, however, are naive — won’t happen because they can’t happen, namely, public financing of campaigns, barring private money, no lobbyist money. And we can’t select a candidate to support, being a 501c3. We wouldn’t want to anyway because we hope all candidates consider our viewpoint, and we don’t care what party they may be in.
Both Pritzker and Rauner bought their offices. You’re good with that? The PACS and large donors have unfettered access and steer policy. You’re good with that? Why not amend to contributions of 1000 or less? Is that naive? Why not push for substantive change? If we can’t take the big money out, nothing will change.
Good luck selling any IL-backed bonds.