House approves jobs bill: Do states deserve $26 billion more stimulus?
The House of Representatives cut short its August recess to return to Washington and pass a state jobs bill Tuesday. Supporters say the bill is much-needed additional stimulus; detractors argue that it has too little money to really make a dent in states' budget problems.
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No, states can do without it.
Opponents of the legislation say the Recovery Act and other stimulus measures aren't living up to their promise of job creation. They argue that what's needed to lift the job market and revive private-sector confidence, rather than more deficit spending by the federal government, is low tax rates and relief from uncertainty about the direction of federal policies.
The bill is paid for by tax changes that are hailed by President Obama as reducing incentives for employers to shift jobs overseas. But in a Tuesday statement, House Republican leader John Boehner (R) of Ohio called it a "job-killing tax hike" on US employers.
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"Everyone knows that state budgets have been hit hard and no one wants teachers or police officers to lose their jobs," Mr. Boehner said. "But where do the bailouts end? Are we going to bail out states next year and the year after that, too?"
In fact, some critics of the bill argue that the threat of 300,000 teacher layoffs, without the bill, is exaggerated. Columnist Charles Lane at the Washington Post calls this an upper-end estimate, put out by teachers unions and school administrators, and argues that the real number of jobs at stake "could be as low as 100,000."
Those are still real people who would lose jobs. But with more than 3 million teachers in US schools, he argues that the student-teacher ratio could remain below 16 to 1.
Critics of the bill also say the states should use their current fiscal crunch as a wake-up call to reset out-of-control pensions and benefits for public workers.
One important fact can cut both ways in the jobs-bill debate: The $26 billion won't come close to filling the hole in state budgets. The governors association says the states have cut spending by about 11 percent since 2008. But the group says a large gap between spending and revenues remains to be closed: about $127 billion for the period from 2010 to 2012.
To supporters of the new legislation, that shows that Washington is simply offering some emergency help, not a free pass. To critics, the fact that states have already been making hard decisions suggests that the sky wouldn't fall if they had to do without the extra help.