Recently, President Obama has been urging Congress to pass legislation that will provide $50 billion in aid to the states to fill budget gaps related to education/teachers, health care, and emergency personnel such as police and firefighters. Specifically, the legislation includes “$23 billion to help prevent teacher layoffs, $25 billion for state healthcare aid and $2 billion for cops and firefighters.”
The idea is simple. Without the aid, states will be forced to cut jobs and services in these areas, increase deficits, raise taxes, or a combination of these. Regardless of the outcome, it will have a disastrous effect on states already struggling to make ends meet while reviving their economy.
The plan, however, is meeting resistance from both parties, particularly from Republicans. Some Democrats, such as Majority Leader Steny Hoyer have asked Obama to consider using unallocated funds from last year’s stimulus bill. Republicans are pointing to the fact that Democrats are not abiding by their own Pay-Go (Pay-As-You-Go) legislation which requires new spending to be paid for by cutting spending or raising taxes.