Struggling states seeking more aid from Washington

by
July 11, 2010

By LIZ SIDOTI (AP)

BOSTON — Governors hamstrung by the sluggish economic rebound in their states and bound to balance their own budgets are pressing anew for Washington to step up with more help, some say even if it means adding to the nation’s red ink.

Republicans and Democrats alike wrestled with how to capitalize on a fledgling rebound as they talked dollars and sense at their summer meeting just days into a new state budget year and as the economy shapes dozens of gubernatorial races across the country.

“All states still are facing tough fiscal situations even though I do believe we’re in recovery,” said West Virginia Gov. Joe Manchin, a Democrat who’s taking over as chairman of the National Governors Association.

Added Gov. Jim Douglas, R-Vt., the outgoing chairman: “Governors have done what is necessary to get through this” — repeatedly cutting budgets, restructuring government, laying off workers and draining rainy day funds.

But both men said states can’t continue to climb out of the recession alone, and the NGA renewed its bipartisan appeal for Congress to pass stalled jobs legislation that includes billions of dollars in aid to states.

Just days before the new budget year began in states July 1, the House and Senate failed to complete legislation that would have extended, through June 2011, important parts of the federal stimulus program enacted last year to provide unemployment insurance and help offset recession-driven cuts to education, health care and public safety.

The measure offered $35.5 billion for unemployment benefits for the long-term jobless and $16 billion for Medicaid, the public health care program for the poor. It also would have added an estimated $33 billion to the deficit.

Even so, several Democratic governors suggested in interviews and during panel discussions that the short-term gain was worth the long-term pain. But some Republican governors were more tentative in their support, suggesting any aid should be offset by paying for it from other areas of the budget.

In February, 47 governors sent a letter in February to Congress requesting lawmakers give states more money for Medicaid, and NGA leadership renewed that call as the three-day gathering opened. Said Douglas: “We’ve taken a pretty clear position on it. We’re for it.” Still, he acknowledged disagreements over how to pay for it and added: “We need to find that common ground.”

Republicans privately said NGA didn’t send a new letter during this meeting because support in the GOP ranks had thinned over the last several months. The party is facing angry tea party advocates demanding less spending.

To read more, visit: http://www.google.com/hostednews/ap/article/ALeqM5gPcuKLCFev6Vg7ZRNE7asQid3CtAD9GSG7303

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