Governors call for $1 trillion stimulus
Aid would ease pain of state budget cuts
NEW YORK – To help offset state budget cuts, a group of governors on Friday urged the federal government to pass a trillion-dollar economic stimulus package, significantly larger than the one under discussion in Congress.
The package would help states compensate for cuts to education spending, as well as bolster infrastructure projects and benefits programs for the poor, said the Democratic governors from New York, New Jersey, Massachusetts, Ohio and Wisconsin in a news conference held by phone.
The governors said $1 trillion – significantly more than the $675 billion to $775 billion reportedly being considered in Congress – is needed to avoid harmful reductions in areas such as education that could cause long-term economic decline. They said the package must be large enough to have psychological and economic impact.
“The scope of it needs to be substantial,” and it must “include this education piece,” said Gov. Jon Corzine of New Jersey.
The governors recommend that the stimulus plan include $350 billion for infrastructure, including transportation, wastewater and broadband projects; $250 billion for anti-poverty programs such as Medicaid, unemployment insurance, food stamps and child care; $250 billion in flexible education spending to maintain funding for programs from pre-kindergarten to higher education; and middle-class tax cuts.
The money, disbursed over two years, would offset cuts needed to balance state budgets and would serve as a “bridge” until 2011, by which time the governors hope the economy will have recovered, said Massachusetts Gov. Deval L. Patrick.
President-elect Barack Obama’s transition team has been talking with this group since a bipartisan gathering of 49 governors and governors-elect in Philadelphia last month, said a transition official. Some of the group met with senior transition staff members before developing their formal proposal, the official added.
At least 41 states and the District of Columbia face budget deficits totaling $42 billion this year, according to the Center on Budget and Policy Priorities.
Obama has said he wants to create or save 3 million jobs in the next two years, and on Monday he is to discuss his economic recovery plan with the bipartisan leadership of Congress. He has asked state leaders for lists of infrastructure projects that are “shovel-ready” – meaning they can be started with federal funding in the next six months.