Washington has a way of blurring the human impact of a major policy debate -- such as the one going on right now over the stimulus -- by using vague and dense terminology to describe certain programs. Take, for instance, this talk of "state stabilization funds" that were cut back by $40 billion this weekend in the deal cut by Senate centrists.
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The term sounds bone-dry, but the stabilization funds are a crucial bulwark against budget deficits that are already forcing layoffs, cutbacks, and higher taxes and fees in 39 states, 21 of which have at least one GOP senator. You heard right: Senate Republicans are insisting on cutting federal aid to their own states in the name of fiscal responsibility -- while some of these state governments are actually pulling back on tax breaks in response.
"If you take a combination of the [budget] gaps for the rest of the current fiscal year, the gaps for the next fiscal year, and the gaps for 2011, [when] unemployment is still going to be high ... we estimate that the [total state budget] gap is $350 billion to $370 billion," Nick Johnson, director of the state fiscal project at the Center on Budget and Policy Priorities (CBPP), told me.
Compare that two-year deficit to the $79 billion in state stabilization funding that was included in both the House and Senate's original stimulus bills; then consider that the Senate's compromise left states with only $39 billion to close their budget gaps. Better yet, consider the plights of Maine and Arizona ...