Economy -- Gubernatorial Grandstanding

March 26, 2009

by Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Benjamin Armbruster, Ali Frick, Ryan Powers, and Pat Garofalo

ECONOMY

Gubernatorial Grandstanding

Since President Obama signed the economic recovery package into law last month, a handful of Republican governors have come out and "rejected" some of the funds, which are aimed at alleviating budget cuts plaguing state and local governments. For instance, Gov. Bobby Jindal (R-LA) turned down $98 million in extended unemployment benefits, while Gov. Sarah Palin (R-AK) initially planned to reject half of Alaska's funding, including $160 million for education. During the press conference announcing her decision, Palin asked, "Will we chart our own course, or will Washington engineer it for us?" But by rejecting this funding, the governors are turning away one of the most effective forms of stimulus available, despite the budget crunches that they are all facing. At least 47 states are facing budget shortfalls for this year and next, and 34 states have made budget cuts that will harm vulnerable residents. As it stands now, the stimulus package is "sufficient only to fill about 40 percent of the $350 billion to $370 billion shortfall that states face in the next two-and-a-half years," and unemployment rates keep rising. The Progress Report rounds up the actions of some grandstanding governors.

ALASKA'S SARAH PALIN: In rejecting the stimulus funds, Palin complained about "the strings attached" and said, "I can't attest to every fund that's being offered the state in the stimulus package will be used to create jobs and stimulate the economy, so I'm requesting only those things that I know will." The Anchorage Daily News criticized Palin for her decision, saying, "It makes you wonder if her national political ambitions are leading her one way, when what's best for Alaska leads another," and residents organized a protest last Saturday to urge the governor to accept the money. Top Alaskan legislators have said "they're likely to accept at least most of the federal economic stimulus money that Gov. Sarah Palin did not," prompting Palin to NOW claim that "she didn't say she would actively block the money, and would be willing to participate in a discussion with the Legislature about what they would accept."

SOUTH CAROLINA'S MARK SANFORD: Despite South Carolina having the second highest unemployment rate in the nation, Sanford rejected $700 million in stimulus, saying, "[W]hat you're doing is buying into the notion that if we just print some more money that we don't have and send it to different states, we'll create jobs. ... If that's the case, why isn't Zimbabwe a rich place?" According to calculations made by the White House, Sanford's refusal of the funds eliminates 50,000 potential jobs, and the South Carolina Department of Education estimated that, without the money, 7,500 teachers would be negatively impacted. House Speaker Bobby Harrell said that absent federal funding, South Carolina would have to close three to four prisons, release an unknown number of prisoners, and lay off 4,000 to 5,000 teachers. "I am very frustrated," Harrell said. "We're talking about affecting lives of people in this state in a very bad way." Sanford twice requested permission to redirect the funds to paying down his state's debt, and was twice rebuffed by the Obama administration.

LOUISIANA'S BOBBY JINDAL: Claiming that it could lead to a tax increase on small businesses, Jindal rejected $98 million federal unemployment assistance. "That would've actually raised taxes on Louisiana businesses. We as a state would've been responsible for paying for those benefits after the federal money disappeared," he said. Clarence Hawkins, the mayor of Bastrop, LA, replied to Jindal, saying, "[G]ive me something now. ... Help me right now. I need to survive today." The Center for American Progress Action Fund concluded that Louisiana added 430 new unemployed people every day in December. Many Louisiana companies -- including River West Medical Center, Dow Chemical Co., Louisiana Pacific and Shreveport-Bossier City casinos -- have laid off workers. Furthermore, if cuts announced by Jindal occur next year, officials from the Louisiana State University system estimate that 2,000 employees might be laid off. According to a letter sent by the U.S. Department of Labor, "Louisiana would not be required to make a permanent change in state law by accepting the federal dollars expanding unemployment benefits." State Sen. Eric LaFleur (D) said that the letter "dispels the governor's argument."

MISSISSIPPI'S HALEY BARBOUR: Barbour advanced the same false argument about unemployment benefits as Jindal, claiming that accepting the money would mean raising unemployment taxes on businesses by 20 percent each year. "Some people have suggested that we change our law and then change it back once the stimulus money is spent, but that isn't honest," he said. State House Majority Leader Tyrone Ellis (D) replied, "I just think it's a sad commentary that we're even discussing such a thing. ... It's puzzling to me why any governor or government would suggest that we are only going to take part of the money and not all of it." Mississippi has an 8.7 percent unemployment rate, though the rate tops 19 percent for some counties. The state House voted to accept the stimulus’ funding over Barbour's objections, certifying "the state's intent to request and use all of the money, even if Barbour rejects some of it." However, efforts to bypass Barbour have stalled in the state Senate.

TEXAS'S RICK PERRY: Perry rejected $555 million in unemployment benefits, saying, "[T]his was pretty simple for us. ... We can take care of ourselves. And we do not need any more strings from Washington attached to programs." But according to the Dallas Morning News, "Texas covers the smallest percentage of unemployed workers of any state," and "four out of five laid-off workers are not eligible for unemployment benefits." Texas's unemployment rate is at a 19-year high, and the state's unemployment fund is running low, "making a tax hike for employers almost a certainty next year." The Texas Comptroller "estimates Texas will lose 111,000 jobs in 2009, hiking unemployment to 8.2 percent." The Texas House appropriations committee has "endorsed enacting the necessary changes to state law so that Texas would be eligible for the money."

CIVIL RIGHTS -- VERMONT GOVERNOR ANNOUNCES THAT HE WILL VETO MARRIAGE EQUALITY BILL: Claiming he wants to focus on more pressing issues, Vermont Governor Jim Douglas (R) announced yesterday that he will veto a marriage equality bill moving quickly through the state's legislature. The state Senate "overwhelmingly approved the bill" last week, and the House is expected to approve it soon. "During these extraordinary times the speculation about my decision has added to the anxiety of the moment and further diverts attention from our most pressing issues," he said, adding, "I cannot allow that to happen." Nevertheless, Douglas allowed "speculation" about his decision whether or not he would veto the bill to linger for weeks. Vermont House Speaker Shap Smith (D) said that Douglas' action at this stage in the legislative process is "really undermining democracy in some respects." Since Democrats have the votes to override the veto, Douglas's plans only drag out the process unnecessarily. Beth Robinson, an attorney with the Vermont Freedom to Marry Task Force, argued that the marriage equality bill directly benefits more "pressing issues" such as the economy. "This is not a distraction from our economic situation, it is one factor in a multi-pronged approach," Robinson said. "The state of Massachusetts, for instance, has used its gay marriage statute as a way to attempt to draw workers in technology fields from California." Indeed, a 2008 UCLA study found that allowing same-sex marriage would have boosted California's economy by $683.6 million over three years, allowing for industries to create over 2,100 new jobs.

ENVIRONMENT -- POLLUTION INDUSTRY ECONOMISTS CLAIM A SUSTAINABLE ECONOMY IS A 'PONZI SCHEME': In a polluter-funded piece masquerading as an academic study, three conservative economists and a librarian attack, among others, the Center for American Progress's green jobs proposal. Led by economist Andrew Morriss and funded by the Institute for Energy Research, they argue, "Our review of the claims of green jobs proponents, however, leaves us skeptical because the green jobs literature is rife with internal contradictions, vague terminology, dubious science, and ignorance of basic economic principle. ... Investing taxpayers' money in developing green jobs as an economic and environmental panacea, are likely, like a Ponzi scheme, to result in empty bank accounts." However, as Joe Romm explains at Climate Progress the Institute for Energy Research's "facts" are actually illogical and internally inconsistent arguments. The only "Ponzi scheme" when it comes to energy policy is continuing a debt-and-depletion fossil fuel economy, as eventually easily-recoverable oil, coal, and other fuels that took millions of years to form will run out. Additionally, the economic consequences of climate change is not addressed anywhere in the 97-page piece. Morriss previously claimed that the United States "made a wrong turn" when the Clean Air Act was passed and the Environmental Protection Agency was created. As the Wonk Room's Brad Johnson notes, Morriss is employed by "three different fossil-fueled right-wing think tanks."

HEALTH CARE -- MEDIA PERPETUATE MYTH THAT INSURANCE INDUSTRY IS OFFERING CONCESSIONS FOR REFORM: On Wednesday, America's Health Insurance Plans (AHIP) and the Blue Cross Blue Shield Association formally announced that the insurance industry would be willing to charge every American the same price for health insurance coverage and eliminate pre-existing condition exclusions if the government protected its market monopoly, required all Americans to purchase insurance and held off on the new public health option. The next day, USA Today, The Wall Street Journal, and The New York Times happily amplified their message, saying that AHIP and Blue Cross "marked one of the first concrete steps forward in the process" and calling the groups "constructive participants" and "flexible." Yet it is unclear how they are being flexible. The industry made similar "concessions" in 1992, which it then rejected once an actual plan was in place. Moreover, the industry's plan is one in which it has nothing to lose because it pairs its guarantee with a government individual mandate (to get more customers to buy). However, it also proposes a modified community rating "according to age, geography, family size and plan design," meaning that someone living in a wealthier area (i.e. healthier) could be charged less than those in the inner city (i.e. in poorer health).

U.S. and Pakistani intelligence officials are "drawing up a fresh list of terrorist targets for Predator drone strikes along the Pakistan-Afghanistan border, part of a U.S. review of the drone program." Pakistani officials want the program to target domestic extremists. Adding to the "fragility of the situation," the U.S. believes Pakistan’s intelligence agency is supporting the Taliban in Afghanistan.

Today, Treasury Secretary Tim Geithner plans to propose "a sweeping expansion of federal authority over the financial system, breaking from an era in which the government stood back from financial markets and allowed participants to decide how much risk to take in the pursuit of profit." The plan would regulate derivative trading for the first time, as well as hedge funds and large insurers like AIG.

Despite the focus on Wall Street executives and their bonuses, "This is a blue-collar recession, just like we saw in '81," Andrew Sum, professor of labor economics at Northeastern University, told the Washington Times. "In fact, we've seen no net loss among college graduates. At least not yet." Close to 70 percent of the 5 million jobs lost in the recession belonged to blue-collar workers, Sum said.

"Melting glaciers in the Alps may prompt Italy and Switzerland to redraw their borders near the Matterhorn," according to new legislation being prepared in Rome. "This draft law is born out the necessity to revise and verify the frontiers given the changes in climate and atmosphere," Franco Narducci of Italy's Democratic Party said.

Secretary of State Hillary Clinton offered "a blunt mea culpa," in Mexico yesterday saying that U.S. "anti-narcotics policies have been a failure and have contributed to the explosion of drug violence south of the border." "Our insatiable demand for illegal drugs fuels the drug trade," she said, adding, "Our inability to prevent weapons from being illegally smuggled across the border" arms the drug warriors.

Senate Majority Leader Harry Reid (D-NV) indicated yesterday that he's willing to use the budget reconciliation process "to move sweeping health care legislation through the Senate" without the chance of a filibuster. "I think it’s something we need to consider," said Reid on a conference call with reporters. Reid cautioned though that he wanted to give Sen. Max Baucus's (D-MT) bipartisan effort "a shot" first.

Yesterday, an Air Force F-22 crashed at Edwards Air Force base in California, killing the test pilot who was a contractor with the aircraft's manufacturer, Lockheed Martin. The F-22, while in service overseas, has not been used in missions over Iraq or Afghanistan, and Defense Secretary Robert Gates recently questioned their usefulness.

"The military is racing to inspect more than 90,000 U.S.-run facilities across Iraq to reduce a deadly threat troops face far off the battlefield: electrocution or shock while showering or using appliances." According to military documents, approximately "one-third of the inspections so far have turned up major electrical problems."

During a Senate Judiciary Committee yesterday, FBI Director Robert S. Mueller III urged Congress "to renew intelligence-gathering measures in the USA Patriot Act that are set to expire in December, calling them 'exceptional' tools to help protect national security." Mueller particularly advocated for a provision that "helps authorities secure access to business records." Civil liberties groups oppose the provision.

And finally: On Tuesday, ousted Illinois governor Rod Blagojevich guest-hosted a Chicago radio show, where he "didn't waste any time before blasting his successor's proposal to increase the income tax." Chicago Tribune columnist John Kass said he came off as an "angry jester" and a "hairy Johnny Carson in the morning." For his part, Blagojevich seemed to have trouble accepting his new situation, stumbling over his title as "former governor" when he introduced himself at the show's start.

Yesterday, the House passed the Christopher and Dana Reeve Paralysis Act. The bill "will promote collaborative research, rehabilitation and quality of life initiatives" for Americans living with spinal cord injuries.

THINK PROGRESS: Fox News' Bill O'Reilly lashes out at Think Progress: "They're insects."

WONK ROOM: Sen. Kent Conrad's (D-ND) budget markup rolls the die on health care reform.

YGLESIAS: The Office of Management and Budget retracts its "war on terror" disavowal.

WONKETTE: Rep. Eric Cantor (R-VA) skipped President Obama's press conference to attend a Britney Spears concert.

HAWAII: Civil-unions bill is stuck in the state legislature and is "likely dead."

NATIONAL SECURITY: "More than 230 cities in at least 45 U.S. states, as far removed from Mexico as Alaska and Hawaii, have reported evidence of Mexican drug-trafficking in their areas since 2006."

ENVIRONMENT: "Congress approved the largest expansion of the wilderness system in 15 years, bestowing the highest level of federal protection on two million acres in nine states."

"So I mean, it really bothers me, this teleprompter. ... It bothers me that this man [President Obama] doesn't -- this man is always on prompter."
-- Fox News's Glenn Beck, 3/25/09

VERSUS

"I’m totally fine with him having a teleprompter. I really am."
-- Beck, 3/25/09

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