Obama pleads for 50B in local aid

[Avernus]

http://www.washingtonpost.com/wp-dyn/conte...1204152_pf.html

Obama pleads for $50 billion in state, local aid

By Lori Montgomery

Washington Post Staff Writer

Sunday, June 13, 2010; A01

 

President Obama urged reluctant lawmakers Saturday to quickly approve nearly $50 billion in emergency aid to state and local governments, saying the money is needed to avoid "massive layoffs of teachers, police and firefighters" and to support the still-fragile economic recovery.

 

In a letter to congressional leaders, Obama defended last year's huge economic stimulus package, saying it helped break the economy's free fall, but argued that more spending is urgent and unavoidable. "We must take these emergency measures," he wrote in an appeal aimed primarily at members of his own party.

 

The letter comes as rising concern about the national debt is undermining congressional support for additional spending to bolster the economy. Many economists say more spending could help bring down persistently high unemployment, but with Republicans making an issue of the record deficits run up during the recession, many Democratic lawmakers are eager to turn off the stimulus tap.

 

"I think there is spending fatigue," House Majority Leader Steny H. Hoyer (D-Md.) said recently. "It's tough in both houses to get votes."

 

Democrats, particularly in the House, have voted for politically costly initiatives at Obama's insistence, most notably health-care and climate change legislation. But faced with an electorate widely viewed as angry and hostile to incumbents, many are increasingly reluctant to take politically unpopular positions.

 

The House last month stripped Obama's request for $24 billion in state aid from a bill that would extend emergency benefits for jobless workers. Senate Majority Leader Harry M. Reid (D-Nev.) hopes to restore that funding but with debate in that chamber set to resume this week, he acknowledges that he has yet to assemble the votes for final passage. Obama's request for $23 billion to avert the layoffs of as many as 300,000 public school teachers has not won support in either chamber.

 

Mixed signals

Senior Democratic congressional aides said those initiatives have not gained traction in part because the White House has not made additional spending on the economy a clear priority.

 

In recent weeks, for instance, the White House has appeared more intent on cutting spending -- threatening to veto a defense bill over a jet engine project that the Pentagon views as unnecessary and urging every agency to come up with a list of low-priority programs for elimination. Obama has also proposed a three-year freeze in discretionary spending unrelated to national security, an idea endorsed by leaders of both parties at a meeting at the White House last week, according to Obama's letter.

 

With the letter, however, Obama makes a direct and unequivocal case for additional "targeted investments," including state aid and several less-expensive initiatives aimed at assisting small businesses. He specifically calls for passage of the measure that is before the Senate, which would extend unemployment benefits and offer states additional aid, increasing deficits by nearly $80 billion over the next decade.

 

Obama asks lawmakers to be patient on the deficit, noting that a special commission is at work on a comprehensive deficit-reduction plan.

 

"It is essential that we continue to explore additional measures to spur job creation and build momentum toward recovery, even as we establish a path to long-term fiscal discipline," Obama wrote. "At this critical moment, we cannot afford to slide backwards just as our recovery is taking hold."

 

In an interview, White House Chief of Staff Rahm Emanuel said the letter is intended to settle the growing debate over the opposing priorities of job creation and deficit reduction and "where you put your thumb on the scale."

 

"While some people say you have to spend and some people say you have to cut, the president wants to talk about both cuts and investing," Emanuel said.

 

GOP alternative

Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell (R-Ky.), called the letter full of "contradictions."

 

"He's calling on Congress to pass a [jobless] bill that will add about $80 billion to the deficit, but then calls for fiscal discipline; he says these measures need to be targeted and temporary, but then calls for extending programs passed in the stimulus more than a year ago," Stewart said in an e-mail.

 

Republicans have offered an alternative package that proposes to cover the cost of additional jobless benefits -- but not aid to state governments -- by cutting federal spending elsewhere. In contrast to the Democratic bill, the GOP measure would reduce deficits by nearly $55 billion over the next decade, according to the nonpartisan Congressional Budget Office.

 

The politics of the Democratic bill before the Senate are further complicated because it has become a grab bag of must-pass provisions. In addition to state aid and more money for jobless benefits, it includes a plan to extend $32 billion in expired tax breaks for individuals and businesses and a separate provision, known as the "doc fix," that would postpone until 2012 a scheduled pay cut for doctors who see Medicare patients.

 

When it was first unveiled last month, the total cost of the package approached $200 billion, with only about $50 billion paid for through higher taxes on multinational corporations, hedge fund managers and certain small businesses. Conservative Democrats in the House balked, forcing House leaders to scale back the doc fix and strip out the state aid, as well as $6 billion in health insurance subsidies for jobless workers. In the letter, Obama asks Congress to reconsider that decision. The House narrowly approved the trimmed-down bill.

 

Now the Senate is struggling to assemble a 60-vote coalition for the measure. Reid moved last week to restore the state aid, but the CBO said the resulting measure would add nearly $80 billion to budget deficits over the next decade. Moderates objected, saying they could not support such a big increase in borrowing at a time when the total national debt has topped $13 trillion, nearly 90 percent of the gross domestic product.

 

On Saturday, as Obama called for urgent action, senior Senate aides said the scramble for votes would delay final action on the bill for at least another week.

 

[SEC=UGA]

More money for big business and unions... While us small business owners just sit here working our asses off trying to keep ourselves solvent until all of this turns around.

[wiegie]

$50 billion is basically nothing when you have unemployment at close to double-digits.

[TimC]

$50 billion can create like :doeswiegiemath: 38 jobs.

[wiegie]

$50 billion can create like :doeswiegiemath: 38 jobs.

Yes, but each of those jobs will pay $23,000 per year, so it is still a good deal.

[TimC]

Yes, but each of those jobs will pay $23,000 per year, so it is still a good deal.

 

Yep...That humming sound you hear is our economy.

[Big John]

Yep...That humming sound you hear is our economy.

Or the horns in South Africa?

[MikesVikes]

$50 billion can create like :doeswiegiemath: 38 jobs.

 

Wow! You could build like a stadium in every NFL city for that! That would create more than 38 jobs. Every NFL owner deserves this.

[westvirginia]

$50 billion is basically nothing when you have unemployment at close to double-digits.

 

And the unions will continue to strangle the taxpayers in these states and municipalities. If California and Michigan cannot fund themselves, it should NOT be allowed the political expedient of taking the money away from those whose fiscal house stayed (more or less) in order just to continue business as usual. The government isn't a freakin' jobs program.

[wirehairman]

And the unions will continue to strangle the taxpayers in these states and municipalities. If California and Michigan cannot fund themselves, it should NOT be allowed the political expedient of taking the money away from those whose fiscal house stayed (more or less) in order just to continue business as usual. The government isn't a freakin' jobs program.

 

+1

 

Isn't each state responsible for maintaining its own budget through reasonable taxes/fees and responsible spending versus relying on the other 49 states to bail them out? Oh, I forgot. Individual responsibility, no matter the scale, no longer has a place in our society . . .

[Azazello1313]

I'd rather see the states and localities (and their public sector unions) confront reality now than take a handout to continue doing the same thing. this would just be throwing good money after bad, until the next time they come back with their hands out.

 

if they really want to incur more debt to finance job growth, just implement a payroll tax holiday. the fact that proposals like that, which would spur private job growth, aren't even on the table shows that this proposal is more about throwing a $50B bone to political constituents than anything else.

[wiegie]

And the unions will continue to strangle the taxpayers in these states and municipalities. If California and Michigan cannot fund themselves, it should NOT be allowed the political expedient of taking the money away from those whose fiscal house stayed (more or less) in order just to continue business as usual. The government isn't a freakin' jobs program.

It's funny that you picked CA and MI to complain about since those two states historically (1981-2005, see link below) are in the top 5 net CONTRIBUTORS to the federal budget.

 

http://www.scribd.com/doc/8229012/Tax-Dono...-Contrib-States

 

(And for the record, West Virginia is a tax leech.)

[cre8tiff]

It's funny that you picked CA and MI to complain about since those two states historically (1981-2005, see link below) are in the top 5 net CONTRIBUTORS to the federal budget.

 

http://www.scribd.com/doc/8229012/Tax-Dono...-Contrib-States

 

(And for the record, West Virginia is a tax leech.)

 

Ouch, that's gonna leave a mark.

[twiley]

More money for big business and unions... While us small business owners just sit here working our asses off trying to keep ourselves solvent until all of this turns around.

Word.

[Savage Beatings]

Why would we need to approve more stimulus funds when we haven't even come close to exhausting the current stimulus funds?

[Perchoutofwater]

It's funny that you picked CA and MI to complain about since those two states historically (1981-2005, see link below) are in the top 5 net CONTRIBUTORS to the federal budget.

 

http://www.scribd.com/doc/8229012/Tax-Dono...-Contrib-States

 

(And for the record, West Virginia is a tax leech.)

 

The federal government shouldn't be giving money to any of the states with the exception of items such as border and port security. I'm sure there are few other items that are clearly mandated by the Constitution, but redistribution whether it be from individuals to other individuals or from individuals to other states is just wrong as far as I'm concerned.

[MikesVikes]

+1

 

Isn't each state responsible for maintaining its own budget through reasonable taxes/fees and responsible spending versus relying on the other 49 states to bail them out? Oh, I forgot. Individual responsibility, no matter the scale, no longer has a place in our society . . .

 

In Minnesota, our state has been strangled by a Governor with hopes of becoming President. One man has placed more importance with a future campaign over the needs of every citizen of the state. Sometimes money from above is needed to over-compensate for the current stupidity in lower office.

[SEC=UGA]

In Minnesota, our state has been strangled by a Governor with hopes of becoming President. One man has placed more importance with a future campaign over the needs of every citizen of the state. Sometimes money from above is needed to over-compensate for the current stupidity in lower office.

 

You talking bout Al?

[Cunning Runt]

If the money is for teachers, police and fire, I'm all for it.

 

Indiana has been extremely hard-hit on the teacher front. My wife is a teacher and Fort Wayne Community Schools (our school system) was tasked with cutting $15M from its budget. The result was two school closings and a couple hundred teachers losing their jobs. Some will be re-hired, but it's a shame it's come to this.

 

To me, and again IF it 's for teachers, police and fire, then this is where monies should be spent.

[Perchoutofwater]

If the money is for teachers, police and fire, I'm all for it.

 

Indiana has been extremely hard-hit on the teacher front. My wife is a teacher and Fort Wayne Community Schools (our school system) was tasked with cutting $15M from its budget. The result was two school closings and a couple hundred teachers losing their jobs. Some will be re-hired, but it's a shame it's come to this.

 

To me, and again IF it 's for teachers, police and fire, then this is where monies should be spent.

 

Sounds like a good reason to raise your local taxes, not mine.

[borge007]

The federal government shouldn't be giving money to any of the states with the exception of items such as border and port security. I'm sure there are few other items that are clearly mandated by the Constitution, but redistribution whether it be from individuals to other individuals or from individuals to other states is just wrong as far as I'm concerned.

Oh Perch-yer so smart-you know everything

[Cunning Runt]

Sounds like a good reason to raise your local taxes, not mine.

 

Why would we want to raise your local taxes over the IN teacher situation?

 

But hopefully it DOES raise your taxes and ONLY yours. I'll be sure to send you a thank you note.

[Perchoutofwater]

Why would we want to raise your local taxes over the IN teacher situation?

 

But hopefully it DOES raise your taxes and ONLY yours. I'll be sure to send you a thank you note.

 

If the federal government is going to be spending the money, then everyone's taxes are going to be raised, or at least those of us that still pay them.

[bpwallace49]

The State politicians need to be freakin responsible and not run to the fedgov for money. Tough choices need to be made, and the LOCAL politicians need to be held accountable for their own municipalities and problems.

 

There is a LOT of fat that can be cut from state gubmnet before eliminating police/fire and teachers. But those are hot button subjects that will draw sympathy (and hopefully federal cash) so OF COURSE they are the first item "on the chopping block". Frakin politicians . . .

[Perchoutofwater]

The State politicians need to be freakin responsible and not run to the fedgov for money. Tough choices need to be made, and the LOCAL politicians need to be held accountable for their own municipalities and problems.

 

There is a LOT of fat that can be cut from state gubmnet before eliminating police/fire and teachers. But those are hot button subjects that will draw sympathy (and hopefully federal cash) so OF COURSE they are the first item "on the chopping block". Frakin politicians . . .

 

Something else we agree on.