States are just beginning to receive about $250 billion from the $787 billion federal stimulus package signed by President Obama in February. The federal subsidies will offset only a portion of more than $200 billion in projected state budget deficits through fiscal 2011. Stateline.org asked two prominent state legislators whether a second injection of federal aid to states might become necessary.
Both are leaders of the National Conference of State Legislatures, a bipartisan organization representing legislators in all 50 state capitols.
Should there be a second
federal economic stimulus package?
I don’t think we can afford another stimulus. Someone in my subdivision said to me the other day, ‘You’re against it because you’re a Republican and they’re Democrats.’ I said, ‘No, would you let your son buy a car with a 50-year note? … Of course not. The reason you wouldn’t is because 10 years later when he needed a new car, he would still have the full note. …
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We’re spending a lot of (stimulus) money on paving roads. How long is paving the roads going to last-five, seven, 10 years? But that note is a 40-to-50-year note. … Now, I’m not saying I wouldn’t have done it (the stimulus) this year, because I think things probably would have fallen even more off the cliff. But at some point in time, you can’t triple or quadruple the deficits.
I think it’s too early to decide that myself. I mean, I’m cautiously hopeful that we won’t need another Troubled Asset Relief Program (TARP, the financial system bailout program) and that most of the TARP money will be paid back. I believe that’s shaping up to be the case. I don’t think we’ll know if we need another stimulus for another year. …
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(Sen. Balfour and I) probably disagree on what kind of note that (the stimulus package) is. I think it’s more of a 15-to-20-year note, and I think if and when-and I think it’s really a when-the economy rebounds and we hit one of those high-growth periods, we can pay this off. But the bottom line is we really have no alternative right now. Whatever kind of year note it was, right now we had to act because the federal government is the only institution in the United States of America that has the ability to impact a recession and keep us out of depression. And I think it had to happen.
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