Hoping to create jobs and bolster Medicaid health programs, Democrats in Congress want a slice of the economic stimulus bill to go to states.
President-elect Barack Obama will be put to the task when he meets with the nation’s governors. The governors’ are requesting $176 billion of the $500 economic stimulus bill and they want it fast. They want their piece of the economic stimulus bill pie. Read: IRS Tips for Tax Filers on Economic Stimulus Payments
The economic downturn has been downgraded to a recession and the nation’s governors want relief to their citizens and not just financial institutions and the automobile industry. President-elect Obama and his economic advisers will need to find creative ways to infuse the economy with the proposed economic stimulus package.
"The slowing economy is resulting in growing unemployment, increased demand for state services and significant declines in state revenues," said Gov. Jim Douglas (R-Vt.), who is vice chairman of the National Governors Association. "It's critical this happen as soon as possible." Read: Economic Stimulus Tax Rebate Calculator
"We have a consensus, which is pretty rare, between conservative economists and liberal economists, that we need a big stimulus package that will jolt the economy back into shape," he said recently. "Across the board, people believe that this stimulus is critical."
Getting the economy back into shape is priority to Obama. The states are asking for assurance that they won’t be left out when the economic stimulus bill is passed. So far 43 of 50 states are facing budget shortfalls. Gov. Arnold Schwarzenegger (R-Calif.) has already declared a fiscal emergency.
"Without immediate action, our state is headed for a fiscal disaster," Schwarzenegger said.
States face a specific budgetary challenge; while the federal government can operate with a deficit, many states must balance their budgets. During times of financial stress, Medicaid is often burdened the most. More people are in need of medical assistance during tough financial times, and that’s when budgets are cut for these types of services. The majority of the funds requested from the economic stimulus bill would go to pay for these much needed services.
On the flip side of the Medicaid dilemma, local medical providers get a shot in the arm when they get increased patients. States getting a portion of the economic stimulus bill would be able to keep social service programs running without budget cuts.
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