In Spending Debate, Local Officials Split With Washington GOP

Image has not been found. URL: /wp-content/uploads/2010/02/schwarzenegger-480x320.jpgGov. Arnold Schwarzenegger (R-Calif.) (EPA/ZUMApress.com)

To hear Republicans in Congress tell it, the Grand Old Party is pretty much united against the deficit-spending approach to economic recovery.

Don’t tell that to local GOP officials.

Faced with the most severe budget crises in decades, state and local policymakers from across the country — including a growing list of prominent Republicans — have been only too happy to accept the additional federal funding that accompanied last year’s $787 billion stimulus bill. Not only did that money prop up job markets, many say, but it kept social-service programs running strong during a period of greatest need.

[Economy1]“I don’t apologize for it at all,” Florida GOP Gov. Charlie Crist said Monday of accepting the federal help. “It was the right thing to do. We needed the money.”

That’s not all. Twelve months later — even as Republicans on Capitol Hill are balking at the new jobs bills being pushed by Democrats — a number of conservative governors have unveiled 2011 budget proposals assuming that billions of dollars more are on the way from Washington. Adding to the sense of urgency, 43 of the nation’s 50 governors on Sunday sent a letter to congressional leaders urging billions of dollars in additional Medicaid funding.

The saga highlights the expansive divide between GOP leaders on the national stage — who are focused almost exclusively on how many seats the party can pick up in this year’s mid-term elections — and those running the states, where the more pressing issue is how to balance budgets amid the economic chaos.

The two perspectives couldn’t be more different. Washington’s Republicans — who have voted near-unanimously against the Democrats’ stimulus bills — have effectively bet their political fortunes that those efforts would not only anger an American public grown weary of deficit spending, but would also fail to spur a recovery. An economy in turmoil, therefore, will play to their advantage at the polls in November — leaving them in the odd position of hoping the downturn endures until then. State officials, on the other hand, are grappling in real time with pinched budgets, a scarcity of jobs, and safety-net services threatened by increased demand and falling revenues.

The first group is playing election-year politics; the second is wrestling with urgent budget policies — and the source of the funding is beginning to matter less than whether or not it arrives at all.

In Georgia, for example, GOP Gov. Sonny Perdue’s latest budget proposal assumes that extra federal Medicaid funding will be flowing to the state through the end of June 2011, even though that money under current law expires at the end of 2010.

In Alabama, the 2011 budget proposal from Gov. Bob Riley (R) makes similar assumptions. The list goes on.

“If you anticipate something is going to pass, it would be asinine for us to go in and build a budget that would require people maybe to be laid off,” Riley said last month. It makes little sense, he added, “to build a budget based on things that we really don’t think will happen.”

If congressional Republicans had their way, those lay-offs might be forthcoming. Indeed, although most economists agree that more federal spending is necessary to spur hiring, only five Republicans voted in favor of the modest $15 billion jobs bill that jumped a vital procedural hurdle in the Senate on Monday.

In similar fashion, not a single Republican voted for the $154 billion jobs bill that passed the House in December. House Minority Leader John Boehner (R-Ohio) at the time called the legislation “budget-busting,” “fiscally irresponsible” and “unconscionable.”

Yet what’s unconscionable in the eyes of Washington is often economic necessity to many state officials faced with the worst budget crises in generations. In this environment, getting more stabilizing money from Washington is more important than the politically driven crusade against deficit spending.

On Sunday, for example, GOP Gov. Arnold Schwarzenegger chided the Republicans of Capitol Hill for their anti-stimulus sentiments, urging them to “think about the people rather than politics.”

“Anyone that says that [the stimulus] hasn’t created the jobs,” he said, “should talk to the 150,000 people that have been getting jobs in California.”

A series of recent reports point out the potential perils if congressional leaders fail to pass a new spending package tackling the jobs crisis, which has left roughly 17 percent of the workforce underemployed. Economists at the Center on Budget and Policy Priorities are warning that, without a new wave of funding for states, an additional 900,000 jobs would be lost. Analysts at the National Employment Law Project caution that 5 million workers will exhaust their unemployment benefits in the next four month without an extension of the filing deadline. And Families USA, a health-care advocacy group, estimates that hundreds of thousands of low-income folks would lose their Medicaid benefits if the extra federal help expires in January as scheduled.

It’s a dynamic that hasn’t been lost on the White House. On Monday, President Obama urged the nation’s governors to support his efforts to improve the economy — deficit spending or none.

“As governors, I know you feel the same responsibility to see the people we serve through difficult times,” Obama said.

State officials, even Republicans who’ve built a career massaging an image of fiscal hawkishness, appear more than willing to oblige.

“Government spending in and of itself is not stimulus,” Florida state Rep. Dean Cannon (R) said in December as lawmakers were fighting to secure $2.5 billion in federal funding for a high-speed rail project. “But where we can draw down more federal dollars and put Floridians to work building something … I think folks are probably more comfortable with that.”

Newly elected Sen. Scott Brown (R-Mass.), a wildcard in the jobs debate, agreed, siding Monday with the Democrats, who needed at least two Republican defectors to pass their $15 billion jobs bill.

“I wish the tax cuts were deeper and broader,” Brown said in a statement issued just before the vote, “but I will vote for it because it contains measures that will help put people back to work.”

*TWI researcher Julissa Treviño contributed to this report. *