Monday, June 22, 2009

Governer earned his veto overrides

Bluffton Today

The one-day wrap to the session was over by close of business on Tuesday. Most of the outstanding business had to do with dealing with the governor’s vetoes and finalizing the creation of a tax reform study group that will look seriously at how we raise money to do the people’s business in the future. (Yes, Karen, we are looking at the Fair Tax.)

All 10 of the vetoes were overridden. There were two pieces of legislation that became law after the overrides that, for the life of me, I cannot understand why they warranted a veto. One was the Buy South Carolina legislation, and the other was the Payday Lending Bill.

The Buy South Carolina legislation was simply a bill to give a preference to in-state suppliers when the state makes purchases. In my view, this was first and foremost, a jobs bill. Even if there was a price difference, which is often negligible, between the in-state and out-of-state product, the fact that local products mean local jobs makes the difference meaningless. This was clear to virtually every member of the General Assembly, but somehow escaped the governor. It was not an agonizing decision to override this veto.

You have heard me more than a few times talk about how jobs and economic development will trump, in my book, ideological purity any day, any time. There is a general consensus in the legislature that the governor’s veto in matters such as this has to do with a particular brand of libertarianism, and a constituency largely beyond the borders of our state. This may or may not be accurate-- I can’t say. I do know that my constituency is you, my neighbors and friends in District 118, with a view to the greater good and prosperity of our state. I represent you and I am responsible to you and for you.

The second veto that I think was particularly ill considered was of the Payday Lending Bill. This bill had been in the pipeline for literally years. Opinion in the legislature was all over the map, from outright banning the industry to allowing them to essentially self-regulate. The biggest issue was what constitutes fair regulation of an industry that many believe takes advantage of people who can least afford it, and who are most vulnerable to the temptation of “easy credit”.

We struggled with this for several sessions, hearing from all the stakeholders and hearing story after story of people getting over their heads into unmanageable debt. We pretty much wrestled it to the ground and came up with a bill that was reluctantly agreed to by both industry and consumer advocates. It was ultimately passed by the House 102-6 and in the Senate by 41-4.
The legislation puts into place significant safeguards to protect consumers and also creates a database to make sure that particularly improvident borrowers are not “flipping” loans, that is taking out new loans to help retire old ones. Depending upon where you stand, this legislation is either an interim step toward ultimately banning the industry, much like we did with video gambling, or a reasonable step toward regulating a problematic but necessary business which provides emergency liquidity to persons unable to access capital from traditional sources.

The governor vetoed the bill on libertarian grounds: people need to be free to make their own mistakes and live with the consequences. Libertarianism makes for good sound bites but oftentimes ends up looking like the law of the jungle in practice. The vote to override was not even close.