Brown Offers Deficit-Neutral Unemployment Benefits Extension Bill
This morning, Sen. Scott Brown (R-Mass.) said he will introduce a deficit-neutral version of the jobs bill. His Fiscally Responsible Relief for Our States Act of 2010 does not raise taxes or expand the national debt, and instead borrows funds from the American Recovery and Reinvestment Act, last year’s stimulus bill, to pay for federally extended unemployment insurance benefits and other measures.
Last week, I opposed a big spending bill because it called for nearly $60 billion in tax increases and more than $33 billion deficit spending. I said no to this bill because the federal government is clearly addicted to debt and wants to raise taxes on Americans during a time when we can least afford it. This bill was defeated in a bipartisan manner.
There are some programs in that legislation that are important to Massachusetts during this economic crisis — the summer jobs program for young people, unemployment insurance extensions for those still looking for work in this tough economy, as well as additional assistance to the states, known as FMAP — but we need to find a way to pay for them.
My compromise bill uses unspent stimulus funds and cuts wasteful and unnecessary spending in other areas to pay for these important programs. Believe it or not, there is about $37 billion in stimulus money just sitting in a Washington slush fund when it should be put to good use immediately.
While my bill pays for additional FMAP assistance for one more year, this phase-down provides states an opportunity to get their fiscal houses in order — but also makes it clear that they can no longer pass the buck to the federal government, which has budgetary problems of its own.
Of course, state budget problems are very different from federal budget problems. The federal government can run deficits. It can also print money. States can do neither. This has ginned up renewed calls to federalize Medicaid — both to avoid rewarding fiscally irresponsible states by bailing their Medicaid funds out, and to ensure that the program, which offers health care coverage to the poor, is properly and consistently funded.
Additionally, taking the funds from the stimulus … well, takes funds from the stimulus. At a time when many mainstream economists believe the economy needs more juice in the form of government spending, Brown is essentially suggesting holding spending level rather than increasing it. This will not sit well with Democrats. But it is now the Republican party line.