Federal Aid To States Signed Into Law

On Tuesday, the House of Representatives passed legislation that would provide aid to states’ budgets and is predicted to save thousands of teaching jobs. President Obama signed the bill into law as well, providing relief to state budgets that are facing in all over $120 billion in shortfalls for the upcoming fiscal year.


I feel very conflicted by this bill. I understand and can see why Congress wants to pass aid to the sates. However, at what cost? As I’ve mentioned before, I’m a huge budget hawk. I think we need to cut more, find new revenue sources, and even change the structure of how we tax our citizens.

Missouri is projected to get about $400 million to help out the education budget and Medicaid enrollment increases. This will make it easier (not simple though) for states to balance their budgets temporarily. However, it buys extra time and doesn’t address the issues I said above that would actually help solve state and federal budget problems.

Obama has touted this as saving teaching jobs. I don’t believe that this single piece of legislation is saving teaching jobs. By law, class sizes must be a certain number, and maintain a certain level of funding.

Also noted to help pay for this proposal is ending an increase to the aid given to poor families to purchase groceries. This cut in food stamp assistance is a $11.9 billion cut. This is fascinating to me, probably more fascinating than the actual bill passage. I have major questions about this: Do Democrats think it didn’t help those families? Are those families okay now? Are those families going to suffer at the benefit of the state budgets?

We need to look at programs (new and old) and if they aren’t serving their purpose, we must cut the programs. However, this is an interesting cut at a seemingly unusual time.

I’m very skeptical. “The federal government to the rescue” mentality isn’t a smart one fiscally, economically, or rational in my opinion. This idea that “the states can’t run a deficit but let’s allow the federal government help us solve our problems” is one that I have difficulty grasping and agreeing with.


I think that this is a great idea, but only if states use the time that this spending measure buys them to plan ahead.  This is the sort of program that should be favored by people across party lines.  The fact that this stimulus to the states is paid for by closing various loopholes that businesses exploit to send jobs to markets where the labor is cheap and the protections for workers are few makes the proposal even better.  Who does not want to preserve jobs for American workers?

I think that House Minority Leader John Boehner’s comment on the matter was particularly telling.  “Where do the bailouts end?”, he says.  Why is this being looked at as a bailout?  If it is a bailout, it is a bailout for your local police, fire, and other emergency services.  What is wrong with that?  If we were to simply allow these people to be laid off, would Boehner be prepared to deal with the consequences with regards to a decrease in public safety?  Something tells me that the answer to that is no.

This was a bill worth interrupting summer recess for, and it shows that the Democrats in Congress are seeking to truly grapple with the wavering economic recovery.


The Congress and President passed another significant piece of legislation which will help stabilize state government budgets. The problem is simple: state budgets are hurting and this aid provides revenue which will at least reduce the losses and prevent cuts of thousands of state employees such as teachers. Without this aid, property taxes would increase yet again and states would slash thousands of jobs, deepening the descending spiral of economic destruction. This legislation does not cure the problem, but should at least prevent the bottom from falling out of the economy, our education system, and our health.

The legislation is paid for by closing loopholes for multinational corporations. When faced with a decision about what to do with that money, do we continue to allow wealthy corporations to take advantage of loopholes or do we do something for our people and our budget woes? It’s an easy decision. Close the loopholes.

Slashing spending and taxes is good when reasonable and feasible. But slashing both for the sake of upholding a slogan has resulted in worse education, health, environment, economic activity, etc. at the same time as property taxes and other fees increase to make up the difference. Taxes are not cut, they are merely transferred and since tax cuts have gone disproportionately to the wealthy, the transferred burden has disproportionately affected the working and middle classes. To those who bought into the “no new taxes” jargon, I have some ocean front property in Arizona for you.

Critics would prefer to go forward with the cuts, but they are living in the 1990’s when cash was flush and trillions of dollars of cuts had not yet taken place. When you cut long enough, you are no longer cutting fat or even meat…you’re cutting bone.

Some critics also criticize the measure as a means of growing unions. They miss the obvious here too and that is that this bill does not grow the ranks of state employees, but rather merely reduces the losses.

The problem in this debate is like many others. Reactionary folks on both extremes make superficial judgments that they pass off as analysis. In reality their claims hold no water when facts are examined. Unfortunately, in this day of cable news facts are both in low supply and low demand and knee-jerk analysis that reinforces people’s preconceived notions prevails.


2 Responses to Federal Aid To States Signed Into Law

  1. Troy says:

    The cuts to food stamps won’t take effect until 2014 and then will merely return them to pre-economic-stimulus levels: http://www.foxnews.com/politics/2010/08/10/democrats-advocacy-groups-blast-cuts-food-stamps-fund-m-jobs/

    • craigs2040 says:

      I gotcha. I have heard that. I don’t know if that fixes the problem because how many programs are “scheduled” to expire and then they will just continue. This may be one of those programs. Also, I have a problem with counting potential savings after 2014 as “cutting the cost” of the bill. The fact remains that it will add to the deficit and not save taxpayers money in the short term, but it will cost them more. It’s very misleading on all ends in my opinion.

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