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A political clash is brewing over a clause in Utah law that has big implications for the state's growing population of jobless senior citizens.
For the past five years, working Utahns over age 65 laid off through no fault of their own have been able to collect some unemployment benefits in addition to their Social Security retirement checks. But the law is set to expire halfway through 2010, meaning state legislators will have to wade into the controversy when they convene in January.
Known on Capitol Hill as ``the Social Security offset,'' the issue pits the powerful interests of Utah employers - --- who pay for unemployment insurance -- against those of the growing ranks of elderly Utahns who continue
Utah is one of only seven states that cuts unemployment benefits for those receiving Social Security retirement benefits. Right now, the Beehive State offsets jobless checks of seniors by only half their retirement cash. If the break is allowed to expire, those unemployment benefits will go back to being cut by the full Social Security payment.
Political lines on the issue already are forming. Members of a key state advisory council split 5-5 on the offset last month and lobbyists are now working the Capitol.
Advocates for struggling employers are campaigning to have the break expire. Groups representing retirees and labor are pressing the argument that the change would be unfair and borders on age discrimination.
With the graying baby-boomer trend, the number of over-65 Utahns still working has risen from 192,000 in 2000 to 247,000 today. That population will swell to 389,000 in 10 years, according to the state's best projections.
Unemployment insurance is just as much a rightful benefit to those older workers as younger ones, regardless of whether they draw Social Security, says state Rep. Steve Mascaro, a West Jordan Republican.
``Is there something about turning 65 that says you are not entitled to the benefits you were when you were 40 years old or 50 years old?'' Mascaro asked. ``Not to my mind. I thought age discrimination was against the law in this country.''
The group AARP Utah, which lobbies on behalf of about 220,000 Utahns over 50, takes the same position: ``The fact that you have a Social Security benefit should not affect your ability to get a benefit you've earned through working,'' said Laura Polacheck, AARP Utah's associate director.
Polacheck speaks for people such as Henry Hazelgreen, who retired to Logan three years ago after a 25-year career as a New
He chose the Cache Valley so he and wife Patricia could be closer to their grandchildren. And, after settling in, Hazelgreen took part-time jobs as a driver for an auto-parts store and in customer service to supplement his income and to "keep busy." But a few months ago he was laid off.
Hazelgreen said state lawmakers will be making a big mistake if they side with business over seniors.
``One of the reasons Republicans are in such a pickle is that they seem to be thinking the business world is the only answer and, in this case, to hell with you older people,'' he said. ``But when older people go to the polls, those politicians just might find out that they're going to get bitten.''
It's no secret Utah employers have political clout, and they are jittery right now about unemployment costs. The state's trust fund for paying such benefits has been heavily depleted by an unprecedented spike in jobless claims and is projected to dwindle from $640 million to $122 million in the next two years. Under a complex state formula, that drop automatically will trigger hikes in employer-paid premiums.
State lawmakers lowered the Social Security offset to 50 percent five years ago as a temporary step, paid for out of a rare $60 million windfall of surplus federal unemployment money from the U.S. Treasury. That cash now is gone.
The cost to employers of having no Social Security offset might seem relatively small -- it's estimated now at $4 million yearly -- but a bigger principle is at stake, says one influential lobbyist for employers.
``It doesn't make any sense to add to that downward trend during these hard economic times,'' said Tom Bingham, executive director of the Utah Manufacturers Association, representing about 800 large employers. ``The analogy I tell people is, if you found yourself unemployed, it'd be no time to go buy a new boat.''
While a tiny minority of states have held on to any kind of Social Security offset in recent years, state unemployment trust funds across the country are going broke, Bingham noted. ``Why would we follow them into deficit spending?''
Besides, unemployment benefits always were intended as a stopgap to cover basic living expenses, says Jim Olsen, director of the Utah Food Industry Association.
"And if they can be covered by other sources, the state doesn't give those people benefits," added Olsen, whose group represents about 350 Utah grocery- and convenience-store operators.
"As much as I'd like to see this money in people's hands," Olsen said, "... I can't look myself in the mirror and say that -- when it's not the right thing to do for the health of the trust fund or for employers or for the state.''
The Workforce Services and Community and Economic Development Interim Committee will discuss the Social Security offset Sept. 16 at 2 p.m. in Room 450 at the Utah Capitol.
