Cash-strapped states seek bailout, too Pelosi, other top Dems working on stimulus package BY ROB HOTAKAINEN ● MCCLATCHY NEWSPAPERS ● November 16, 2008
WASHINGTON -- Led by California with a $28-billion hole in its budget, 41 states including Michigan are in financial trouble, and many of their leaders are looking to Congress to bail them out. State officials are hoping to join the ranks of the financial industry and auto manufacturers, who've found a sympathetic ear on Capitol Hill. They've found some key supporters: House Speaker Nancy Pelosi and other top Democrats are promoting aid to states as part of a broad stimulus package that could inject more than $300 billion into the ailing economy. Michigan may have a shortfall of at least $300 million and possibly $800 million, Lansing authorities say. The exact figure has not yet been determined. The idea of a federal bailout is getting a strong bipartisan push from governors across the country, with California Republican Gov. Arnold Schwarzenegger and New York Democratic Gov. David Paterson among the chief proponents. Both are blaming Washington for their states' mounting troubles. Testifying at a recent House of Representatives hearing, Paterson said that New York was "at the epicenter of a national emergency" after federal oversight bodies "utterly failed in their duty" to protect Americans' savings and the U.S. financial system. Speaking Wednesday before a Chamber of Commerce group in Fresno, Calif., Schwarzenegger said that "government is really at fault" and that Washington was obligated to "get us out of this mess." One could argue that the federal government isn't in much better fiscal shape, with a $10.6-trillion debt that's been growing by nearly $4 billion a day for the past year. Unlike the states, however, Congress doesn't have to bother balancing its books. Shifting expenses Critics say that it makes no sense to shift expenses from one unit of government to another. "While state governments fund different functions than the federal government, there is no distinction on who pays the bill: The taxpayer," said California Republican Rep. Kevin McCarthy. He added, however: "It is no surprise that states are looking for a bailout after Congress approved a $700-billion bailout for Wall Street." Compared with such a huge price tag, many state officials regard their requests for help as minimal. California Assembly Speaker Karen Bass said Congress should view states "as deserving of help as much as banks and automakers and everyone else in line for funds." If Congress can give $700 billion to financial institutions, she asked: "Can we have $5 or $6" billion? "We can't let one of the world's largest economies go over the cliff," she said in California. Stalled in Senate Pelosi has been urging passage of a stimulus package for months. In September, the House passed a $61-billion stimulus that included aid to states to help them pay for Medicaid costs, emergency food assistance, more spending on infrastructure and an extension of unemployment benefits. The stimulus stalled in the Senate, however. Since the House vote, Pelosi said, the economic crisis has worsened and "the need for more" money "has grown." House Minority Leader John Boehner, R-Ohio, charged that the $300-billion bailout would be "aimed at social and pork-barrel programs" that would hurt small-business owners and families. "Our path to economic recovery is not more tax-and-spend government programs that spread the wealth." This message has been scanned for malware by SurfControl plc. www.surfcontrol.com _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
