Governors v. Congress

Discussion in 'Congress' started by Skull Pilot, Feb 23, 2009.

  1. Skull Pilot
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    Skull Pilot Platinum Member

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    Several Republican Governors Decline Federal Stimulus Money - WSJ.com

    Debt-laden state governments were supposed to be the big winners from the $787 billion economic stimulus bill. But at least five Republican Governors are saying thanks but no thanks to some of the $150 billion of "free" money doled out to states, because it could make their budget headaches much worse down the line. And they're right.

    These Governors -- Haley Barbour of Mississippi, Bobby Jindal of Louisiana, Butch Otter of Idaho, Rick Perry of Texas and Mark Sanford of South Carolina -- all have the same objection: The tens of billions of dollars of aid for health care, welfare and education will disappear in two years and leave states with no way to finance the expanded programs. Mr. Perry sent a letter to President Obama last week warning that Texas may refuse certain stimulus funds. "If this money expands entitlements, we will not accept it. This is exactly how addicts get hooked on drugs," he says.

    Consider South Carolina. Its annual budget is roughly $7 billion and the stimulus will send about $2.8 billion to the state over two years. But to spend the hundreds of millions of dollars allocated to the likes of Head Start, child care subsidies and special education, the state will have to enroll thousands of new families into the programs. "There's no way politically we're going to be able to push people out of the program in two years when the federal money runs out," Mr. Sanford says.

    The Medicaid money for states is also a fiscal time bomb. The stimulus bill temporarily increases the share of state Medicaid bills reimbursed by the federal government by two or three percentage points. High-income states now pay about half the Medicaid costs, and in low-income states the feds pay about 70%. Much of the stimulus money will cover health-care costs for unemployed workers and single workers without kids. But in 2011 almost all the $80 billion of extra federal Medicaid money vanishes. Does Congress really expect states to dump one million people or more from Medicaid at that stage?

    The alternative, as we've warned, is that Congress will simply extend these transfer payments indefinitely. Pete Stark, David Obey and Nancy Pelosi no doubt intend exactly this, which could triple the stimulus price tag to as much as $3 trillion in additional spending and debt service over 10 years. But the states would still have to pick up their share of this tab for these new entitlements in perpetuity. Thanks, Washington.

    Governors are protesting loudest over the $7 billion for unemployment insurance (UI) expansions. Under the law, states will increase UI benefits by $25 a week. The law also encourages states to cover part-time workers for the first time. The UI program is partly paid for by state payroll taxes imposed on employers of between 0.5% and 1% of each worker's pay. Mr. Barbour says that in Mississippi "we will absolutely have to raise our payroll tax on employers to keep benefits running after the federal dollars run out. This will cost our state jobs, so we'd rather not have these dollars in the first place."

    The problem for these Governors is that they may be forced to spend the federal money whether they want it or not. Representative James Clyburn of South Carolina slipped a little-noticed provision into the stimulus bill giving state legislatures the power to overrule Governors and spend the money "by means of the adoption of a concurrent resolution." Most state legislatures are versions of Congress; they can't say no to new spending.

    These five Governors deserve credit for blowing the whistle on the federal trap that Washington has set for their budgets. They stand in contrast to most of the other Governors, who are praising the stimulus as a way to paper over their fiscal holes through 2010. But money from Congress is never as free as it looks, as the banks can attest. Don't be surprised if two years from now states are still facing mountainous deficits. They will have their Uncle Sam to thank.
     
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  2. jillian
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    jillian Princess Supporting Member

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    hypocrites.... they'll take the money when their legislatures vote to.... like bobby jindal running for pres in 2012 has nothing to do with him turning down the money... :lol:
     
  3. Skull Pilot
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    Skull Pilot Platinum Member

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    If state legislatures override the governor, said governor will have no choice but to take the money and said state legislatures become the tool of the federal government in its attempt to erode the sovereign rights of states.

    did you not read this part?

    The problem for these Governors is that they may be forced to spend the federal money whether they want it or not. Representative James Clyburn of South Carolina slipped a little-noticed provision into the stimulus bill giving state legislatures the power to overrule Governors and spend the money "by means of the adoption of a concurrent resolution." Most state legislatures are versions of Congress; they can't say no to new spending.



    Talk about the fucking feds doing an end run around states rights.
     
  4. Kevin_Kennedy
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    Kevin_Kennedy Defend Liberty

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    It's a nice gesture I guess, but I don't think any of the governors should refuse the money. Their citizens are going to be taxed for it, and their currency is going to be devalued so they might as well see something for all of that.
     
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  5. Truthmatters
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    Truthmatters BANNED

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    I hope someone actaully doesnt take the money.

    They can stand as an example of how it worked in the other states.
     
  6. Skull Pilot
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    Skull Pilot Platinum Member

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    even when in 2 years, states are left holding the bag for all the new entitlement spending that will no longer be funded by the feds?

    Penny wise pound foolish, unless of course you are in favor of multi trillion dollar "stimuli" packages in perpetuity.
     
  7. Vel
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    Vel Gold Member

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    Can you really not see the potential problems with accepting the money? How do you propose that states pay for all the additional welfare when the federal money runs out?
     
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  8. rayboyusmc
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    rayboyusmc Senior Member

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    Stick with the tax cuts only. wow, what a frigging brialliant idea.:cuckoo:
     
  9. Ravi
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    Ravi Diamond Member

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    I read Jindal plans on turning down 2% of the money...money meant to extend unemployment payments. I'm sure his constituents are going to hold that against him. Nevertheless, what a coward. 2%?

    And Perry is asking for 1,000 more border agents and slamming the Fed at the same time?

    These people crack me up.
     
  10. cunclusion
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    cunclusion Member

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    Do you guys understand anything, in South Carolina the state I am in the state is suppose to help the poorer/rural counties with their education expenses and its not even doing that right, Gov. Sanford please he is all about himself period if he cared for the people he would know what is important and what is not. This state has some of the worst scores yet him and the congress keep cutting education spending. And what do you know now the schools that have money are starting to feel the pressure. HOW IN THE HELL DO YOU HAVE A SCHOOL THAT RUN DOWN TEACHING OUR FUTURE. All you who state hey the currency will lose its value the spending is wasteful are speaking good points but you never say anything good about what needs to be done. Come on guys you all know atleast I hope you do that our education system is suffering..
     

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