Posted by
Civis on Saturday, March 21, 2009 12:05:25 PM
The States will never be able to take back the power they have acquiesced to the federal government unless they can reduce the federal tax burden. The current debate regarding federal funds has been framed to pit governors that care about their citizens by accepting federal funds against governors that are grandstanders or do not care about its citizens by rejecting portions.
Money equals power and the US Congress has no respect for the rule of law, as documented by their most recent actions. They screw up the bailout bills and allow for certain bonuses and then propose confiscatory taxes (which may prove to be unconstitutional) to make up for their blunder.
Senator Schumer from New York
February 24, 2009
Dear Director Orszag:
In recent days, a small minority of governors, mostly Republicans, have publicly weighed the possibility of foregoing certain emergency provisions provided under the American Economic Recovery and Reinvestment Act signed last week by President Obama. I believe this prospect not only would undercut the stimulative effect of the recovery package, but also is inconsistent with a key provision included in the law passed by Congress. To protect the integrity of the recovery program, I urge the administration to issue implementation guidance clarifying that while any Governor may exercise his or her discretion to accept or reject the federal funds provided in the stimulus, no Governor should have the authority to arbitrarily adopt a select subset of the overall package.
As you know, Section 1607(a) of the economic recovery legislation provides that the Governor of each state must certify a request for stimulus funds before any money can flow. No language in this provision, however, permits the governor to selectively adopt some components of the bill while rejecting others. To allow such picking and choosing would, in effect, empower the governors with a line-item veto authority that President Obama himself did not possess at the time he signed the legislation. It would also undermine the overall success of the bill, as the components most singled out for criticism by these governors are among the most productive measures in terms of stimulating the economy.
For instance, at least two governors have proposed rejecting a program to expand unemployment insurance for laid-off workers. Economists consistently rank unemployment insurance among the most efficient and cost-effective fiscal stimulus measures; by one frequently cited estimate, it provides an economic return of as high as $1.73 for every dollar invested. Thus, by denying this provision for their residents, these governors are not just depriving some of the neediest Americans of relief in a dire economy; they are undermining the overall stimulative impact of the package.
No one would dispute that these governors should be given the choice as to whether to accept the funds or not. But it should not be multiple choice. The composition of the package was rightly dictated by economic considerations; we should not let the implementation of the package be dictated by political considerations.
Sincerely,
Alaska
"We think it is outrageous that we have a governor who is willing to turn down Alaskans' fair share of federal stimulus money, money that would go to education, public safety, unemployment resources, health programs," said Patti Higgins, chairwoman of the Alaska Democratic Party.
"Federal spending represents about one-third of Alaska's economy each year," Democrat Bob Poe said. "The federal government owns 59 percent of Alaska, and Sarah Palin is rejecting this $288 million because she thinks it will give the federal government too much control over Alaska? Personally, I find that kind of incomprehensible."
Louisiana
"He seems to be trying to play both sides of the fence. He might refuse some of the money, he might take some of the money," said Louisiana Democratic Party spokesman Scott Jordan.
"We've got almost $2 billion, education, health care, coastal restoration," he said. "The notion that Governor Jindal would turn down money that would help in those areas ... is just crazy."