Democrats Push Cash for States as Key Part of Stimulus Bill
Lawmakers say that $200 billion in aid for states will help prevent tax hikes to pay for education
In an attempt to whip up support for the $825 billion stimulus package on the eve of its vote in the House, governors and House Speaker Nancy Pelosi came out today to emphasize the necessity of a key portion of the package—its aid to states.
More than $200 billion of the current package, which is due to reach the floor of the House for a vote tomorrow, would go to states and localities. That includes $87 billion in federal money to state Medicaid programs, about $120 billion to education, and $4 billion for state and local law enforcement funding.
That's a smart investment, says Pelosi, because every dollar in state aid creates $1.38 in economic activity.
Critics have said that funneling federal money to states rewards those governments for poor budgeting and amounts to another "bailout." Unsurprisingly, however, governors Ed Rendell of Pennsylvania and Jim Douglas of Vermont disagreed. "We are not seeking to avoid responsibility as a result of this federal money," Rendell said. "We are all making painful cuts."
And, he said, with states currently facing budget deficits of more than $200 billion, failing to pass a stimulus with state aid would not just be a slap on the wrist for state governments—it would affect citizens.
"Without the aid to the states, what would happen?" Rendell asked. "The states would have to raise taxes. And without the aid to education, what would the local school districts have to do? They would have to raise taxes."
Tax cuts are a key portion of the House draft of the stimulus, accounting for a third of its $825 billion price tag. But those tax cuts, which include a $1,000 cut to working families, would be wiped away if state and local governments had to raise taxes, Rendell said.
Douglas, a Republican, also urged quick passage of the bill. Unlike many in his party, he emphasized that the bill must be passed quickly, despite concerns over expanding the federal deficit.
"For the short term," he said, "we really do need to get this help to the states."
- Read more news about the stimulus.
Reader Comments
Where to get bill
http://www.gpoaccess.gov/bills/index.html
Economic Stimulus
Where can I read the entire proposed Economic Stimulus?
Than you
Barbara J.Lund
406-466-3613
More Enabling
I knew this was coming: a (proposed) bailout of the States. I live in California where we have a $40 billion budget shortfall due to a Democrat-dominated-controlled legislature who never met a taxpayer's dollar they didn't like or couldn't spend faster than you could blink an eye. As much as I would like to punish the California Governor and Legislators for failing the decent tax-paying citizens of California, I think we are due the money from the Feds because they have failed us on Immigration. The failure of the Federal Government to police the borders and punish businesses who attract illegal immigrants has resulted in millions of people added to the public welfare rolls. It's also resulted in part to an exodus of good people and businesses out of the state. To me, California has a big receivable outstanding from the Federal Government and if this is the moment to get payback, well so be it. In my mind, I will count any assistance to California from the S.P. as just recent historical payback. However any budget shortfalls that happen in the future, I will continue to ask that California citizens vote out these corrupt politicians in Sacramento who collectively create a culture of failure in our fair state.
advertisement
