As David W. so ably walked us through, the House's one-day recess break today will hopefully end up with stop-gap funding for desperate states. And an opportunity for Republicans to screech about bailouts.
Republicans call the state aid a giveaway to please teacher unions and other Democratic constituents, while Democrats are eager for a victory in their stalled jobs agenda. House approval would send the bill to Obama to be signed into law.
House Speaker Nancy Pelosi, a California Democrat, said Republicans are opposing “a fully paid-for jobs bill that reduces the deficit and keeps teachers in the classroom and police officers on the beat. Instead, congressional Republicans demean our education and law enforcement officials as ‘special interests.’”
....
State and local governments are facing a budget gap totaling $84 billion, according to the National Conference of State Legislatures, triggered primarily by weak sales and income tax revenue.
Unemployed people don't spend a lot. They also tend to end up on Medicaid, and the states have to accept them and provide care. All in all, this $26 billion is a fraction of what states need.
Economist Mark Zandi, a former adviser to 2008 Republican presidential candidate John McCain, called the legislation “a very good idea,” estimating it would save 150,000 jobs. He said it made little difference whether the money is earmarked for Medicaid or teachers because the bill will free up funding for other obligations.
It won’t spare thousands more from pink slips, Zandi said, estimating states will still have to cut another quarter-million jobs over the next year. “Even with the $26 billion, they are going to be cutting into real bone,” he said.
Without this money, the picture is even worse. The Center for Budget and Policy Priorities has a chart showing what's at stake for each of the states, if this bill passes with the reminder:
Failure to extend the relief would force states to lay off more workers, cut more services, and raise taxes more than they would otherwise to balance their budgets. These actions will slow an economy that already is growing too slowly to lower the 9.5 percent unemployment rate and that economists fear is already likely to slow more in the months ahead.