Editore"s Note
Tilting at Windmills

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February 8, 2009

WHY STATE CUTS MATTER.... When a handful of Senate Republicans slashed over $100 billion from the economic stimulus package, they specifically targeted $40 billion in proposed aid to states. Helping rescue states, Sen. Collins & Co. said, does not stimulate the economy, and as such doesn't belong in the legislation. Democratic leaders reluctantly went along -- they weren't given a choice since Republicans refuse to give the bill an up-or-down vote -- and the $40 billion in aid was eliminated.

It's probably worth taking a moment to consider the consequences of this. States, facing the kind of crisis unseen in generations, are prohibited from running deficits, and are averse to raising taxes, so drastic shortfalls mean drastic cuts -- which in turn make the effects of the recession worse.

They have plundered reserves, enacted hiring freezes and engaged in all manner of budgetary voodoo to shield us from the pain.

But now state governments -- reeling from a historic free fall in tax revenue -- have run out of tricks. And Americans are about to feel it. In some cases, they already have.

Nevada resident Margaret Frye-Jackman, 71, was diagnosed in August with ovarian cancer. She had two rounds of chemotherapy at University Medical Center, the only public hospital in the Las Vegas area.

Soon after, she and her daughter heard the news on TV: The hospital's outpatient oncology services were closing because of state Medicaid cuts. Treatment for Frye-Jackman and hundreds of other cancer patients was eliminated.

Luckily, Frye-Jackman's gynecological oncologist, Dr. Nick Spirtos, decided to open a tiny chemotherapy center in his office's empty storage room.

Today, he treats Frye-Jackman there, along with about 20 more cancer patients who were dumped by the hospital. Frye-Jackman's care is paid for with Medicare and supplemental insurance, but other patients can't cover the cost of full treatment. The doctor has considered putting donation boxes in the lobby.

"If this is what it's like in Nevada, with cancer stuff closing, is it like that everywhere?" said Frye-Jackman's daughter, Margaret Bakes, accompanying her mother to the doctor's recently. "Are all the other states closing stuff too?"

As a matter of fact, yes. Collectively, states are looking at a $47.4-billion gap for 2009, which is likely to get considerably worse in 2010 and 2011. The result, as the LAT noted, will be massive layoffs at the state level and huge cutbacks in services: "Parks will close. Environmental programs will be scaled back. Bus and ferry routes will shut down, possibly sending more drivers onto clogged streets and highways. Schools may go without school nurses, and classes may become more crowded. Sick people who rely on state health programs may instead get sicker."

Cutting state aid from the stimulus bill is a very bad idea. Congress can get the money to states quickly, and give states a much needed boost at exactly the right time. I don't know what Collins & Co. are thinking, but they need to think again.

Steve Benen 8:00 AM Permalink | Trackbacks | Comments (50)

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My hope at this point is that he will go on the road (i.e., outside the Washingtonian echo chamber of CW), talk with the people that have been victimized by the rampant greed and corruption of the past two or three decades, return to DC, and say "We are going to revitalize the stimulus bill with the spending that the PEOPLE want, and forget the unneeded tax cuts, which the PEOPLE don't want."

PEOPLE see the wealthy, connected class as the problem, and NOT tax cuts.

Posted by: kleven-stein on February 8, 2009 at 8:15 AM | PERMALINK

I know what the Rs are thinking: screw up the stim package, make it fail, make it look like Obamas failure. Its their only route to credibility: sabotage.

It's the Dems I can't understand. Why are they allowing this?It would be better to keep the state money in, bring the whole package up for a vote and have it fail. That would make it clear that the fault lay with the Republicans.

I am hoping that the DEma are going along with this because they plan to pass the stae money anyway by majority vote as short term spending.

Posted by: wonkie on February 8, 2009 at 8:18 AM | PERMALINK

Collins and Snowe see that they have enormous power and get their mugs on TV a lot where they are treated as statespersons on the order of Disraeli. That's all they see. If they chose between the Democratic plan and the Republican plan, shut up and voted, they'd be the obscure back-benchers they should be.

Posted by: JMG on February 8, 2009 at 8:18 AM | PERMALINK

Jenna Wolfe, cohost of The Today Show today, calls this state aid one of Obama's "pet projects." Arf! I hope that in conference Dems drop the ATM fix and dump the Isakson $15K for new homes and re-add the state funds. Limit the scope of the debate to the most obvious issues. Expose the Republicans and put the spotlight on Collins, Snowe and Specter.

Posted by: Danp on February 8, 2009 at 8:23 AM | PERMALINK

I work for one of those states that has cut pay and must resort to layoffs this fiscal year. Next fiscal year may not be any better. So how do job losses stimulate?

Posted by: mark on February 8, 2009 at 8:37 AM | PERMALINK

When the Fresno City government asks for a small stimulus to meter waste pick-up, then I will consider this theory.

But I doubt we are in the mess because the State of California suddenly needed a huge boost in state workers.

Posted by: M on February 8, 2009 at 8:45 AM | PERMALINK

Why do Republicans hate Americans?

Seriously, why?

Posted by: Henry on February 8, 2009 at 8:47 AM | PERMALINK

wonkie said:
I know what the Rs are thinking: screw up the stim package, make it fail, make it look like Obamas failure. Its their only route to credibility: sabotage.

I think their intention is much more malevolent. But using this bill to cut federal revenue, Republicans will have an excuse to block all the reforms that Obama plans to make in the future:

"We would love to increase the number of people who have health coverage, but the country just can't afford it . . . . "

"We agree that increasing energy independence is a good idea, but with the Democrat [sic] deficit the size that it is, all we can afford to do is drill more . . . . "

Pete Sessions (R-Bizzaro World) is right, the GOP is as fanatical as the Taliban -- the Hooveristas.

Posted by: SteveT on February 8, 2009 at 8:49 AM | PERMALINK

"When a handful of Senate Republicans slashed over $100 billion from the economic stimulus package..."
Hey, what's wrong with this picture!

Posted by: Neil B ◙ on February 8, 2009 at 8:59 AM | PERMALINK

"Democratic leaders reluctantly went along -- they weren't given a choice since Republicans refuse to give the bill an up-or-down vote -- and the $40 billion in aid was eliminated."

Um, correct me if I'm wrong, but I could have sworn that the Democrats had a majority in the Senate. How can the Rethuglicans "refuse" to allow an up-or-down vote? Or is this yet another example of the incredibly flaccid Harry Reid doing his thing?

Posted by: bluestatedon on February 8, 2009 at 9:01 AM | PERMALINK

What bluestatedon said. I've made this point repeatedly (mostly here), and will continue to do so whenever I see left-leaning folk blaming Republicans for this mess.

A dozen Democrats helped water down the stimulus, and it's not because they didn't have options. The Dems' first priority should be to pass the best legislation for the country they can, and compromise in this fashion only as a last resort. Instead these 'centrist' 12 (and to a certain extent, Obama himself) started by compromising.

Bottom line: It is extremely unlikely Dems will find themselves in a stronger position than they have right now. If they can't get things done with the strong majorities and the popular president they currently have, that's their fault, not the Republicans'.

Posted by: David Bailey on February 8, 2009 at 9:10 AM | PERMALINK

The Dems know for certain what the Repug game is and yet they refuse to just marginalize them and pass what Obama wants to have in the stimulus plan. Obama needs to drop the hopes he had for "bipartisanship" and instruct Reid & Pelosi to ram the stimulus thru. The Dems own (whether they like it or not) this economy and recovery now. The Repugs deny they had anything to do with the way things are now. You never hear them mention the over-bloated budgets they passed without a whimper during Bush. They know without a doubt that the only thing on the Repug agenda is for Obama to fail and then they will return to power. I say to the Dems, "tell the Repugs in the words of "DICK" Cheney-- go fuck yourselves".

Posted by: Chris on February 8, 2009 at 9:17 AM | PERMALINK

We should be asking "Why is $700 billion for the banks and Wall Street just fine, and $1 trillion for a war a good thing, four to five hundred billion a year for the 'defense' dept. just ducky, but money for actual, regular people is just wasteful spending?
Jon Stewart started to point this out the other night, but many more voices need to repeat that point.

Posted by: GVC on February 8, 2009 at 9:20 AM | PERMALINK

Pursuant to the Budget act, any bill that will increase the budget deficit requires 60 votes. The need for sixty votes is not only to avoid a filibuster but to pass the stimulus package. So either way we are screwed.

Posted by: Micheline on February 8, 2009 at 9:38 AM | PERMALINK

Bluestatedon, the reason the Rethuglicans could block an up or down vote is that the Democrats have a majority, but not a filibuster-proof majority. To vote for cloture, you need a supermajority of 60%,and the Republicans used the filibuster as a cudgel to block legislation throughout the Clinton Presidency. When Democrats tried it in the Bush years, the Republican majority threatened them with the "nuclear option" of banning filibusters. I wish they'd made good on that threat so that it could bite them in their a$$es now.

If anyone wonders why aid to states is a good idea, they should read the front page of the New York Times today about the plight of Florida, which has basically built its economy on real estate since the 1950's. Florida's main source of income was vacationers buying second homes and retirees buying new residences. Pffft, gone, and the state is losing population at a great rate. What they need desperately now is new industry, new sources of revenue, perhaps a revitalization of agriculture (remember those Florida oranges, many of which used to come from groves since bulldozed to make way for subdivisions?)

Republicans probably have no desire to help a state that went Democratic in the last Presidential election, but even with a dwindling population, Florida will still have a formidable number of electors. This could really blow up in the faces of the GOP.

Posted by: T-Rex on February 8, 2009 at 9:40 AM | PERMALINK


Second: People are reading way too much into the motives here. Keep in mind, it was the "centrists" who came up with this "compromise" plan, not the lunatic right wingers. My belief is the centrists only value being centrists, which the washington establishment continually lauds as being a great thing. Purely and simply the "centrists" wanted to score political points by cutting items that they thought they could politically get away with. They aren't concerned about policy or stimulus, just their own asses. It isn't nefarious, just incredibly self-centered and cynical.

Posted by: john d'oh on February 8, 2009 at 9:53 AM | PERMALINK

I think we all need to write to the "centrists" and tell them how stupid it is to cut state aid from the package. I already sent a letter to Collins and Nelson (used the term idiotic in the message). It may not do any good, but it made me feel a little better (although I know that it will only be read by a staffer).

Posted by: john d'oh on February 8, 2009 at 9:55 AM | PERMALINK

I really don't mind having compromises with intelligent people with differing views, but I really detest the idea of compromising with stupid people.

Posted by: rbe1 on February 8, 2009 at 9:59 AM | PERMALINK

I knew republicans were willing to see thousands of americans dying needless deaths to further their political ambitions, but I thought that even conservative democrats were better than that.

We should all call them and ask why they want Margaret Frye-Jackman to die a very unpleasant death.

Posted by: paul on February 8, 2009 at 10:05 AM | PERMALINK

What was Snowe thinking? She was thnking "I don't have to put out Re-Elect Snowe until 2014".

The problem is What the Hell is Reid thinking?

Posted by: berttheclock on February 8, 2009 at 10:24 AM | PERMALINK

I am a librarian in a public library that serves a cow college town and the surrounding rural areas in the south. Our budgets were never restored after the 2003 cuts, and we're facing even more now.

And we're packed. A year, six months ago, the computers (we have around 45 total) would not fill up until maybe mid-day, then taper off after 7pm. Now they are full within an hour of opening and stay full until we close and have to tell people to leave. And they aren't goofing off; they are job hunting. Because no matter how not-computer-related the job, you have to apply with a nearly-unusable and craptastic online form.

If you want to flip burgers at McDonalds, you have to apply online individually for each store where you could work (say, the ones on the bus lines). If you want to package products to go to vending machine companies, you need a full, formal resume, even if you've never had to do one in the past. If you are just looking for a summer gig to paint dorms at the cow college, you have a 6-page online application; they don't accept paper.

We subsidize these companies by replacing their HR depts. Rather than allow these job hunters to talk to an HR rep at these companies, they are sent by these organizations to the public library; it's even printed on their forms with instructions to go to the public library, because we will help them with the process.

Wal-Mart, who was probably given tax holidays and other incentives to build their store in the county in the first place, sends their employees to us to print out their W-2s, then touts it as a "free benefit provided to our employees by Wal-Mart." It's only "free" to Wal-Mart: the employee pays 40 cents for the 4 pages of print-outs and the state tax payer pays the salaries of the librarians who assist these people with the process, which often takes quite a long time for people who have never had to get near a computer before in their lives.

That's why I'm hoping state aid will be in another bill, one that will force each rep and senator to say that they absolutely chose not to allow money to come into their state to assist their constituents. I don't know if that's true, but it's what I hope.

Sorry for the rant.

Posted by: tess on February 8, 2009 at 10:27 AM | PERMALINK

er, what was I thinking - Should have been Re-Elect Collins, not Snowe.

Posted by: berttheclock on February 8, 2009 at 10:28 AM | PERMALINK

I think we all need to write to the "centrists" and tell them how stupid it is to cut state aid from the package.

Already done. Both of my senators are reported to be in this group. However, I'd suggest being respectful.

Posted by: AK Liberal on February 8, 2009 at 10:33 AM | PERMALINK

Another point that Pres. Obama made the other day and should be repeated:
What ideas are being offered instead of federal spending?
Cut taxes on business and the wealthy and more money for the financial sector and ......
That's it?? Nothing else? No other plan to try? Nothing that government can possibly do?
Their answer is unambiguous and crystal clear.
Especially clear is that the Republicans have not been in touch with the vast majority of Americans who now can't retire, who struggle to pay their bills, who are very nervous about the future, and understand how we got here.

Posted by: GVC on February 8, 2009 at 10:41 AM | PERMALINK

If Collins were thinking anything besides "They're looking at ME! I'm POPULAR!", that would be the news -- she's the only fourteen-year-old Senator.

Posted by: Davis X. Machina on February 8, 2009 at 10:51 AM | PERMALINK

Krugman says Collins & Co's. little "cost-saving" cuts will cost the nation 600,000 jobs over the next two years. When it comes to economic policy, I'll take Prof. Krugman over Profs. Collins, McCain & McConnell.

The Constant Weader at www.RealityChex.com

Posted by: Marie Burns on February 8, 2009 at 11:07 AM | PERMALINK

Everything I've seen of Collins screams nitwit to me. And our great leader is going to suck up to this, this republican-lite financial expert to get something through Reid's mentally handicapped club ? Is that what the landslide victory in November was for ?

Posted by: rbe1 on February 8, 2009 at 11:14 AM | PERMALINK

Let the Republicans filibuster already. Strip the ridiculous tax cuts out. As Businessweek reported this week, the savings rate is going up. Tax cuts will be saved. What should be happening right now - and should have been happening Friday when the unemployment numbers came out - is the press showing the Republicans holding up the job creating stimulus, i.e. talking while more and more people are losing their jobs and healthcare. Harry Reid may have been a boxer at one point. In these negotiations he looks like he's taking a dive.

Posted by: John Henry on February 8, 2009 at 11:26 AM | PERMALINK

An aid to states bill that exempts aid to states unless at least one senator and one resentative, from that state, votes for the bill would probably be perverted by Article. IV. Section 1. of the Constitution, but it certainly would be apropos.

Posted by: capalistpig on February 8, 2009 at 12:16 PM | PERMALINK

But I doubt we are in the mess because the State of California suddenly needed a huge boost in state workers.

No, we just need to be able to pay the state workers we already have, and we can't. But I'm guessing you think it's a good idea for the DMV to be closed on weekends and alternate Fridays because they can't afford to pay people to work it. Hey, it's not like the DMV has any responsibilities or anything, so we really don't need them.

Ditto the health services departments -- what, like kids really need vaccinations? If my grandmother survived the measles, I'm sure most of the kids today can do it, too, and the ones who die were weak anyway.

Posted by: Mnemosyne on February 8, 2009 at 12:23 PM | PERMALINK

Schools may go without school nurses? It's a heck of a lot worse than that. In our district, we're facing teacher layoffs and/or a drastically shortened school year- and that's just in this current year's budget, next year looks much worse. The aid to the states is desperately needed as a lifeline for our schools. Ditto the school construction funding - hello, we are shovel ready too! Ditto the funding for Head Start which will not only employ teachers but help low-income families stabilize/reenter the economy and be a great investment in kids' lifelong success.

Posted by: Ruth in OR on February 8, 2009 at 12:35 PM | PERMALINK

I work for the Oklahoma Department of Rehabilitation. Our job is to get the disabled off of disability and Social Security payments and onto the tax roles as contributing citizens. It has already come down the pike that our budget will be severely cut. That means we will have to stop taking new clients, cut our services to our existing clients and also probably extend employee furloughs thanks to the selfishness of the Republican obstructionists.

I am so angry with the Senate, especially Coburn, who couldn't find his ass with both hands. He's supposeldy a doctor, so I know he's got a chart of the human body somewhere and he STILL couldn't find his ass. He is an embarrassment.

Posted by: Cleo on February 8, 2009 at 12:45 PM | PERMALINK

Four-day-a-week calendars have been approved in some states, which would save money on buses and utilities, to be sure, but cause an immediate 20% increase in day-care spending for a lot of parents. Unless of course, they've just had their hours cut back, and on the same days.

Posted by: Davis X. Machina on February 8, 2009 at 12:47 PM | PERMALINK

Can someone explain to me why the federal government should give money to the states. Last time I checked, the states had their own sources of tax revenues and could use them to finance whatever they deemed to be in the interest of the state.

The simple answers are two. One, states don't want to increase taxes because they know their constituents won't like it and they face sooner reelection and more vulnerability (on average) that the Congress of the US does. Two, many states have balance budget amendments so can't do what the feds do and just borrow cash to finance whatever they want.

You people all act like the states are entitled to cash from the federal government. On what basis do you make that claim other than because you want the money? Well guess what, we don't have the money individually or collectively. So let's fund state services now with money that our kids will either have to repay or, better yet, we'll just print the cash and crash the economy someday.

Posted by: Steve on February 8, 2009 at 1:01 PM | PERMALINK

For the record, not all states are forbidden to have deficits.

Vermont has no requirement to balance the budget.
That is why Howard Dean balancing it ANYWAY for 11 years impressed me so much.

Vermont may choose to have its own Stimulus package. If so, that will be an interesting experiment to watch. Do states that run deficits emerge from Bush's depression faster?

(BTW, now that there are two of them... we can avoid confusion by referring to them as "the Hoover depression" and "the Bush depression".

Please adjust your commentary accordingly.

Posted by: toowearyforoutrage on February 8, 2009 at 1:15 PM | PERMALINK

I never said all states have balance budget amendments. To help your reading comprehension, please note that the word many has a different definition than the word all.

I might also note that your commentary has nothing to do with my point which is that the Federal government should not be giving money to the states because the states have their own sources of funding.

Please adjust your commentary to be on topic ; )

Posted by: Steve on February 8, 2009 at 1:22 PM | PERMALINK

Repubs supposedly know states are laying off cops, firemen, teachers, closing schools, etc. California and a quite a few other states are going bust. Some state workers are being asked to go on furlough for a month or so out of the year (road maintenance in our neck of the woods). Stimulus would have the immediate effect of keeping those people employed and the state running.

How about we re-write HR-1 so that states with Senators that voted for stimulus get it in their state and those that don't have their states keep free of stimulus money. According the the Repubs, this will make sure that their states recover faster and better.

Posted by: Glen on February 8, 2009 at 1:51 PM | PERMALINK

Why is our job to pay for people's chemotherapy, or for that matter, for a breeding sow's 14 future welfare brats. The gravy train is over.

Posted by: redstater on February 8, 2009 at 1:54 PM | PERMALINK

How about the states raise their own taxes to cover it instead? That way, the people in each state will pay what they need to pay to make their budgets balance or, in the alternative, they will cut services to balance the budget or borrow the money (if they are allowed to).

Or would you rather we just borrow money from other countries so that CA can keep its taxes at the same rate because that's effectively what you are asking for?

The governor and the CA legislature could solve the problem but they don't want to because it would make them unpopular. So instead we ask Washington to solve it. Makes no sense to me

Posted by: Steve on February 8, 2009 at 1:56 PM | PERMALINK

It is an article of faith among many conservatives and/or Republicans that all budgets, federal, state, county, city, are bloated and larded with fat, and can therefore be cut with no problems.


Presumably you live in California. Are you willing to have an increase in taxes so services don't need to be cut? Or if you think that the state budget is "bloated" despite a number of years of budget cuts, where do you suggest that the cuts be made?

Posted by: Wolfdaughter on February 8, 2009 at 3:05 PM | PERMALINK

To Tess:

humble suggestion: just let know wal-mart that you will accidentally let their applicant click on a union summary of how to defend their rights when they come to your computer...
Unless Wal-mart starts a campaign for funding your public library, and possibly not with tax-deducted gifts to charities.

Posted by: naive lurker on February 8, 2009 at 4:33 PM | PERMALINK


I don't live in CA but I do visit from time to time. It's not my call how the government balances its budget, it's up to the governor and the state legislature. I'm just saying that we shouldn't ask the people of this country to pay Federal taxes for goods and services that the people of the various states aren't willing to pay state taxes for.

Personally, I am confident that there is a lot of fat remaining in most government budgets because they have only a weak incentive to get rid of it. Even in companies that have a very strong incentive to cut costs, they rarely do. It's unlikely that government with weaker incentives will do better. Having said that, if I'm wrong and raising taxes is the answer (as it is likely to be in my home state), so be it. I'll vote those guys out next time around.

The fact remains that a state budget problem is a state problem, not a Federal one. As a result, the money to solve it (or the savings) should be done by the state and not by all of us through Federal borrowing.

Posted by: Steve on February 8, 2009 at 4:46 PM | PERMALINK

States wouldn't even need to raise taxes in order to maintain their balanced budgets. All they'd need to do is keep *all* of the taxes they collect -- on their own *and the federal* accounts. No money to support the bloated Pentagon, CIA, FBI and the rest? Boo hoo.

That's why we need to support states -- they contribute to the support of the federal government but it's a two-way street.

Posted by: exlibra on February 8, 2009 at 5:12 PM | PERMALINK

I'm just saying that we shouldn't ask the people of this country to pay Federal taxes for goods and services that the people of the various states aren't willing to pay state taxes for.

My tax dollars don't stay here in California -- they get sent to the federal government and we get a portion of them back. In fact, we get back less from the feds than we sent in so poor states like Mississippi can cover their expenses.

Why should California be forced to continue to support poorer states anyway? Let us keep our tax money and we can probably make a go of it. Of course, you'll have people starving in Alabama and Kentucky, especially once we raise our produce prices to cover our expenses, but that's not our problem, right?

Posted by: Mnemosyne on February 8, 2009 at 6:44 PM | PERMALINK

Last I heard there were 13 million illegal aliens living and working in the US If they were made to leave, we could put the 4 million people who have lost their jobs back to work, and have 9 million jobs left over.

Posted by: Steven Burgess on February 8, 2009 at 8:38 PM | PERMALINK

Love to buy a new car. Love to buy a new home. But, alas, I work for state government and don't know if I'll have a job. Is that important?

Posted by: Jody on February 8, 2009 at 9:13 PM | PERMALINK


I want to print out the W-2s for free, just keep a log then have the county bill Wal-Mart. But that isn't likely to happen any time soon.

There were about 35 people waiting at the front door to come in when we opened this afternoon, too.

Posted by: tess on February 8, 2009 at 10:05 PM | PERMALINK

Why do Republicans hate Americans?
Seriously, why?
Posted by: Henry

California is a third world nation by choice. Why should Americans pay them foreign aid? Americans to Mexifornia: Drop dead.

Posted by: Luther on February 9, 2009 at 1:54 AM | PERMALINK

The Democrats aren't "forced" to accept any changes they don't like. They DON'T NEED 60 votes to pass the bill -- only 51 (which they have). If the Republicans want to fillibuster, bring 'em on. They will look and sound ridiculous -- sputtering and sputtering while Rome burns. They won't be able to stand the heat, and will get the hell out of the kitchen.

Posted by: Tim on February 9, 2009 at 2:14 AM | PERMALINK

Cutting off medical aid to cancer patients due budget cuts is political warfare against the tax payer. What is the alternative? Forcing the school teacher and librarians to retire at 52 and 3 months instead of on their 52 birthday?

The Democratics talk about spreading the wealth what they do at the state level is take from the rich AND the poor and give to the public employee!

In a year we all be referring to "stimulus package" as the No Public Employee left behind act.

Posted by: James Torguson on February 9, 2009 at 7:53 AM | PERMALINK



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