From the Dispatch

Federal Recovery Efforts Saved 8.5 Million Jobs, Stopped Depression

Nathan Newman — Thu, 29 Jul 2010 11:49:48 -0400

When big bank speculation crashed the economy, millions were driven into unemployment. But, according to a new study by two leading economists, the combination of the Troubled Asset Relief Program (TARP) loans to banks, loosening of the money supply, and federal stimulus funds for states and individuals, helped stop a far worse potential full-out Depression that would have left an additional 8.5 million Americans without jobs on top of the 8 million who have lost their jobs since the recession started-- what would have been a nearly doubling of the job loss due to the economic crisis.

The study was written by the bipartisan team of Alan Blinder, a former Vice-Chair of the Federal Reserve, and Mark Zandi, a former McCain economic advisor and head of Moody Analytics. One thing the authors emphasize is the sheer magnitude of the economic collapse faced by the Obama Administration as it came into office: In early 2009, "Real GDP was falling at about a 6% annual rate, and monthly job losses averaged close to 750,000." While the lost jobs have not been regained, the economy was stabilized and GDP growth of nearly 3% began. As the authors note:

The stimulus has done what it was supposed to do: end the Great Recession and spur recovery. We do not believe it a coincidence that the turnaround from recession to recovery occurred last summer, just as the ARRA [federal stimulus plan] was providing its maximum economic benefit.

To put the cataclysm faced by the Obama administration in perspective, the economists estimate that the direct budgetary costs of the recession plus lost revenue due to the economic collapse added up to $2.35 trillion, or about 16 percent of G.D.P. By comparison, the savings and loan crisis of the 1980s cost only about $350 billion in today’s dollars.

Federal Support of the States Decisive for Economic Stabilization: With state revenues plunging due to the recession, the authors specifically highlight the importance of recovery funds that went to the states to forestall job-destroying budget cuts. The authors emphasize that "[s]tate and local government aid is another especially potent form of stimulus with a large multiplier," creating economic growth for every dollar spent.

Unfortunately, the federal spending for the states mostly just counterbalanced revenue losses at the state level, meaning the federal aid was a "defensive stimulus" that "saves jobs rather than creates them." The federal government needed to commit to a much larger job creation program to really counterbalance the revenue losses at the state level.

TARP Bank Bailout Program More Successful, Less Costly Than Media Hype: One unique aspect of this report is its focus on quantifying the jobs saved by TARP and related programs to restore credit in the financial industry. The authors estimate that "the financial-rescue policies are credited with saving almost 5 million jobs." And while headlines blared that TARP would cost $700 billion, in fact, most of the money spent was in the form of loans and equity investments, part of which have been repaid. In the end, the authors estimate that the TARP program will end up costing taxpayers less than $100 billion.

The economic success of TARP and related programs in saving jobs should not obscure the fact that the money used could have done even more to improve corporate responsibility in the financial industry. Analysts like Dean Baker at the Center on Economic and Policy Research have rightly criticized the fact that companies like Goldman Sachs received billions of financial rescue dollars without being required to restrict executive compensation or take many other actions in the public interest. This all emphasizes the need for both the recently passed financial reform law as well as federal and state revenue increases targetting those who benefited from successful recovery programs to help fund job creation for those who still need help.

A Success Despite Program Limits: Still, as Blinder and Zandi argue, the financial rescue package helped to "restore stability to the financial system and to end the freefall in housing and auto markets" just as the ARRA recovery plan saved jobs throughout the economy. 8.5 million jobs saved is only a start in light of the almost 15 million Americans that still face unemployment, but that success was critical in avoiding a Despression that would have turned a challenging budget and jobs situation into a completely catastrophic one.

Resources:
Alan Blinder and Mark Zandi - How U.S. Policy Ended the Great Recession
Dean Baker - Goldman Sach's Golden Parachute

Supreme Court 2009-2010: Pro-Corporate, But Continued Trend Towards Deferral to State Authority

Nathan Newman — Tue, 29 Jun 2010 11:26:57 -0400

Yesterday, the Supreme Court ended its term with a bang with a ruling in McDonald v. City of Chicago that state gun control regulations can be struck down by federal courts based on the Second Amendment. While the number and scale of blockbuster decisions was not so high this session, the singular impact of the Citizens United case earlier in the term unleashing unregulated corporate money on elections, combined with the dangerous implications of the Rent-A-Center, West v. Jackson arbitration decision, emphasizes the pro-corporate bias the Supreme Court has increasingly exercised in recent years.

As detailed below, other decisions on public university governance of student groups, property rights challenges to beach restoration programs and regulation of ballot initiative processes, did continue the trend in recent terms of the Supreme Court deferring to state authority in major cases. And criminal justice cases continued to be a mixed bag of protecting individual rights versus upholding state discretion.

Table of Contents:
- Citizens United and the Supreme Court’s Pro-Corporate Bias
- Supreme Court’s Deferral to State Authority
- Criminal Justice
- Conclusion

Citizens United and the Supreme Court’s Pro-Corporate Bias

There is little question that Citizens United will be one of the major cases that defines this year’s term—and in many ways will frame the legacy of the rise of Chief Justice John Roberts and Justice Samuel Alito whose presence on the court has led to the dismemberment of campaign finance regulation.

"A Massive New Threat of Corruption and Corporate Control": With Citizens United, the Supreme court has given corporations the same free speech rights as individuals and allowed unlimited election spending by corporations when not coordinated with candidates.

U.S. Senator Sheldon Whitehouse of Rhode Island said recently,

The Citizens United decision -- yet another 5-4 decision [opens] our democratic system to a massive new threat of corruption and corporate control. There is an unmistakable pattern. For all the talk of umpires and balls and strikes at the Supreme Court, the strike zone for corporations gets better every day.

To emphasize its hostility to restrictions on the power of the wealthy over our elections, the Supreme Court ordered a freeze of Arizona's public financing matching funds system which gives candidates participating in public financing additional funds when opponents spend above benchmarked levels of spending. This means that publicly-financed candidates will be eligible to receive only one-third of the money to which they'd otherwise be entitled.

Letting Corporate Arbitrators Decide if Their Own Decisions are Unfair: In Rent-A-Center, West v. Jackson, the Supreme Court - by the same pro-corporate 5-4 vote lineup of Justices - further closed the courthouse door for individuals abused by their employers. The Court held that employees cannot only be forced to have complaints about racial discrimination or other employer abuses decided by private arbitrators (a reality decided in previous terms), but also that where an employee feels the terms of the arbitration agreement are unfair and unconscionable, it is up to the corporate-chosen arbitrator to decide if the arbitration agreement is unfair. In this case, for example, the arbitration agreement limited claims an employee might bring against the employer, while exempting those claims that Rent-a-Center might raise, and restricted an employee’s ability to gather evidence.

Instead of allowing a judge to decide whether the agreement to arbitrate could be enforced, the Supreme Court majority leaves it to the arbitrator chosen by the agreement alleged to be unfair to decide the issue, cutting off access to the courts even for the most basic threshold issue of whether these arbitrators and the rules imposed are a fair substitute for a day in court.

Privatizing Democracy: So just as corporations now have unlimited rein to use their money without regulation to dominate elections, those same corporations now have de facto have authority to run private courts to decide the legal rights of their own employees without little or no judicial restraint.

Supreme Court’s Deferral to State Authority

However, beyond these pro-corporate decisions, the Supreme Court, often with surprising configurations of majorities, continued its trend in recent years of deferral to state authority in more cases where core corporate interests are not at stake.

States and the Second Amendment: The exception to the trend this year was McDonald v. City of Chicago, which extended the Second Amendment to restrict state gun regulations. But even in that case, the majority went out of its way to affirm that many traditional gun control regulations will still be upheld even where an individual right to keep firearms for self-defense in the home is protected. Since most states have their own constitutional and statutory reasonableness test for gun regulations, the practical effects of McDonald may end up being relatively limited.

Rejecting “Takings” Doctrine: While right-wing constitutional lawyers for years hoped to create a majority to limit most local government land regulations as illegal “takings” under the Constitution, the Court in Stop the Beach Renourishment v. Florida Department of Environmental Protection not only rejected a property rights challenge to a state beach-erosion statute, but Justice Anthony Kennedy refused to even give a fifth vote to the proposition that a court ruling could ever constitute a “taking” of private property, a sign that most reasonable land use regulations will be protected from federal judicial second-guessing in the future.

Universities and Groups Excluding Gay Students: In Christian Legal Society v. Martinez, state universities retained their authority to deny funding to student groups that exclude certain students, such as gay and lesbian students, from membership. The Court upheld the University of California-Hastings' policy of requiring student groups to take on "all comers" as a prerequisite to official school recognition as a reasonable and viewpoint neutral restriction.

Public Disclosure of Ballot Initiative Signers: Given increasing use of fraud by those promoting right-wing ballot initiatives, progressives won an important victory in Doe v. Reed, in which the Court held that disclosure of signers of political ballot initiatives did not generally violate the First Amendment (although they might be able to in the future argue that specific harms could lead to some restriction on disclosure in a future case). In a strong argument for respecting state regulation of ballot initiatives, Justices Sotomayor, Stevens and Ginsburg wrote:

These mechanisms of direct democracy are not compelled by the Federal Constitution. It is instead up to the people of each State, acting in their sovereign capacity, to decide whether and how to permit legislation by popular action. States enjoy “considerable leeway” to choose the subjects that are eligible for placement on the ballot and to specify the requirements for obtaining ballot access (e.g., the number of signatures required, the time for submission, and the method of verification).

Reviewing Public Employee Text Messages: In a slightly idiosyncratic case, the Court in City of Ontario v. Quon unanimously held that a police department’s decision to review the text messages of employees who exceeded the monthly limit on their office pagers in order to determine whether the monthly limit should be raised was reasonable under the Fourth Amendment.

Criminal Justice

Criminal justice decisions by the Supreme Court invariably combine a combination of invocation of individual rights, discussions of state authority and obscure procedural explorations. While cases this term had few singular disruptions of previous principles, they had a number of clear incremental changes effecting state criminal proceedings. (See this ACLU writeup for an extended list of additional cases).

State Convictions and Immigration: Of import for current debates on the role of states in immigration policy, the court ruled in two cases that courts had to carefully weigh how state criminal statutes interact with federal deportation rules:

In Padilla v. Kentucky, the Court held that attorneys have an obligation to carefully advise their clients of the immigration consequences of pleading guilty. In this case, the defendant– a lawful permanent resident for 40 years who pled guilty to drug trafficking – was incorrectly advised by his lawyer that he was unlikely to face deportation because of his long stay in the United States.
In Carchuri-Rosendo v. Holder, a unanimous Court ruled that defendant’s conviction for possession of a single Xanax tablet without prescription, following an earlier state court conviction for possession of less than two ounces of marijuana, could not qualify as an aggravated felony under federal immigration law, and thus did not render the petitioner ineligible for potential discretionary relief from deportation.

Restricting Miranda: The Court significantly limited restrictions the Miranda “right to remain silent” in a series of cases limiting the Miranda ruling:

In the most critical case, in Berghuis, Warden v . Thompkins, a 5-4 decision of the Supreme Court affirmed that a suspect did not properly invoke his right to remain silent, so statements were properly admitted in court. Justice Sotomayor, writing for four dissenters said, “the Court today creates an unworkable and conflicting set of presumptions that will undermine Miranda’s goal.”
In Florida v. Powell, the Court held that police warnings that a suspect had a right “to talk to a lawyer before answering any questions” adequately complied with Miranda, since the right does not require a particular set of words for police compliance.
In a 6-3 Graham v. Florida decision authored by Justice Kennedy, the Supreme Court found a Florida law unconstitutional under the Cruel and Unusual Punishments Clause where juvenile offenders could be sentenced to life in prison without parole for a non-murder.
In Maryland v. Shatzer, the Court held that police did not violate the law by collecting incriminating statements from a person who had invoked his Miranda rights two and a half years earlier, and that the right against interrogation lasts only 14 days after invocation.

In other key decisions effecting state proceedings:

In Bobby v. Van Hook, Wong v. Belmontes and Porter v. McCollum, the court created a series of new standards for when counsel is so ineffective as to warrant a new trial.
In Presley v. Georgia, the Court concluded that a defendant’s Sixth Amendment right to a public trial had been violated when the public was excluded from the jury voir dire proceedings.
In Holland v. Florida, a 7-2 decision authored by Justice Breyer, the Court agreed that an attorney could harm his client so badly that the defendant’s time to seek habeas must be extended.

Conclusion

Elana Kagan’s likely replacement of Justice Stevens on the Court is unlikely to change the broader trends on the Court and states will continue to face the challenge of reining in the corporate election spending unleashed by Citizens United and protecting access to justice in the courts eroded by the Rent-a-Center case. As People for the American Way wrote in a recent report, Rise of the Corporate Court: How the Supreme Court is Putting Businesses First, “the conservative-tilting Court has reached out to enshrine and elevate the power of business corporations.”

While deferral to state authority has emerged as an increasing consensus among the Justices on a number of issues, lurking in the dissents of the most conservative Justices are even more extreme pro-corporate and right-wing views that with one more ally could push legal doctrine in ways that would completely erode democratic decision-making over economic and social policy. So even the more positive trends on the Court warrant only partial relief, since small changes in personnel in the future could readily enable the more activist impulses of the block of the four most right-wing members of the Court.

Resources:
Progressive States Network - The Supreme Court and the States 2008-2009: Trend Defending State Authority Emerges this Term
Scotusblog - Everything you read about the Supreme Court is wrong
ACLU - ACLU Summary of the 2009 Supreme Court Term
People for the American Way - Rise of the Corporate Court: How the Supreme Court is Putting Businesses First
Alliance for Justice - The Corporate Court

Debating Federalism: Conservative False History and Hypocrisy vs. Progressive Collaborative Federalism

Nathan Newman — Tue, 15 Jun 2010 11:57:36 -0400

Conservative state leaders have promoted legislation in states across the country claiming that the health care reform law is an unconstitutional overreach of federal power. While just a handful of the bills were enacted (and most were roundly rejected in states where they were introduced), these attacks on the federal health law are the most prominent example of increasing right-wing legislative agitation declaring various federal laws and actions a violation of the constitution.

Right-Wing “States Rights” Bills: Alaska, Arizona, Idaho, Montana, South Dakota, Tennessee and Wyoming have declared that federal firearm regulations don’t apply to weapons manufactured in those states. Utah has rejected not only the federal health care reform bill, but declared federal lands subject to state eminent domain and asserted the “inviolable sovereignty of the State of Utah under the Tenth Amendment to the Constitution.” Alabama, Alaska and Wyoming have joined Utah in passing resolutions generally denouncing the supposed violations of their state sovereignty. And right-wing legislators have introduced bills to institute a “constitutional tender” requiring a gold standard for money in their states, declaring federal cap-and-trade proposals unconstitutional, making it a state crime for federal agents to arrest anyone in a state without permission from a county sheriff, and more generally nullifying claims by the federal government to regulate most interstate commerce.

Challenging the Right-Wing Constitutional Narrative: The challenge for progressives from this “states rights” movement is not that any of these laws are likely to survive in court, but that conservatives too often get away with claiming to stand for constitutional values without significant challenge from progressives. The reality is that the right wing has no credibility in promoting their states’ rights arguments and should be challenged more directly. As this Dispatch will outline, their arguments fail on multiple grounds:

First, conservative constitutional history is dead wrong. The progressive vision of collaborative federalism between federal and state governments clearly reflects the “original intent” of the Constitution’s creators – including those who promoted the Constitutional Amendments enacted throughout our history.
Second, conservative leaders are constitutional hypocrites, talking about “states rights” even as they support federal laws that restrict state authority in order to protect corporate special interests.
Finally, unlike conservatives, progressives practice real respect for state authority by promoting and supporting state innovation and flexibility, a far more compelling practice of federalism than the rigid and false constitutional doctrine promoted by the right wing.

Progressive legislative leaders need to clearly engage the public and promote our story of a Constitution that was meant to promote a vigorous federal power in promoting equal rights and the general welfare, even as federal leaders should respect and strengthen the capacity of states to take action beyond minimum standards set by the federal government.

Resources
Tenth Amendment Center - Tenth Amendment Movement
The New York Times - States’ Rights Is Rallying Cry for Lawmakers

Table of Contents:

- Conservatives Have Constitutional History Wrong

- Conservatives are Hypocrites in Using Federal Power to Undermine State Authority

- Progressives Promote a Collaborative Federalism that Respects State Authority

- Highlighting the Progressive Model of Collaborative Federalism

Conservatives Have Constitutional History Wrong

Conservative activists try to sell a history of a federal government designed to be weak with limited power, where national leaders without sanction by the American people have taken on responsibilities and powers reserved to state governments. Such a story just flatly misrepresents constitutional history.

The 1787 Constitution Promoted Strong Federal Power: Even when the Constitution and the initial Amendments were drafted in the 18^th century, limited federal power was not what was envisioned by those who drafted. It was George Washington who deployed troops in Pennsylvania to collect excise taxes on distilleries in the suppression of the so-called Whiskey Rebellion of 1794, John Adams who enacted the 1798 Alien and Sedition Acts to regulate newspapers across the country, and Thomas Jefferson who negotiated the Louisiana Purchase and carved out new states. And, as the Supreme Court Justices appointed by those founding drafters of the Constitution said in 1819 in their McCullough v. Maryland decision, affirming the wide authority of the federal government:

Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are Constitutional.

In fact, the progressive complaint of the period before the Civil War was that federal power was vigorously deployed but for the wrong ends. The federal government and courts intervened to overturn state debt relief laws meant to benefit small farmers and other debtors and generally attacked other state laws seen as infringing property rights.

And most obviously, federal government power was used to protect slave owner interests, including overturning state laws in the North seen as impeding the return of runaway slaves. State laws requiring a fair hearing to establish a former slave status before federal agents could return a free black to the South under the Fugitive Slave Act were struck down by federal courts. The Dred Scott case outraged Northern voters because it declared that Southern slaveholders could bring slaves into free territories and ignore the laws freeing slaves voluntarily brought into those jurisdictions.

The Civil War and the New Birth of Freedom Expanding Federal Authority: Where the present-day Tenth Amendment proponents fail history utterly is in systematically denying that the Civil War and the subsequent Amendments enacted ushered in a new Constitutional order in regard to federalism. (The following history is drawn partly from the Brennan Center for Justice’s A New Birth of Freedom: The Forgotten History of the 13th, 14th and 15th Amendments).

The immediate post-Civil War amendments – the 13^th, 14^th and 15^th - created a new constitutional mandate of not only freedom and voting rights for freed slaves, but more broadly gave Congress the “power to enforce, by appropriate legislation” (Section 5 of the 14^th Amendment) the protection of the “privileges or immunities” of Americans overall and to protect them from state abuses denying them “life, liberty or property.”

The “founding fathers” of this new post-Civil War constitutional order would back up these Amendments with federal laws of wide scope, including the Civil Rights Acts prohibiting both public and private discrimination and a federal Freedmen’s Bureau that would operate schools, provide health care, and directly operate other programs in states throughout the South.

Senator John Sherman of Ohio, the brother of General Sherman, summarized the expansive “original intent” of those who drafted the post-Civil War Amendments: “[it] secures to every man within the United States liberty is its broadest terms," with all the enforcement power for Congress needed to make that liberty a reality. While federal courts would back off from the expansive meaning in the wake of the Klan-related violence that ended Reconstruction, modern federal laws supporting health care and education provide exactly the same liberty for the American people that those who enacted the Freedmen’s Bureau’s education and health care programs saw as necessary for liberty in the wake of the Civil War.

Enhanced Federal Authority under the Sixteenth and Seventeen Amendments: Nearly fifty years after the Civil War Amendments, the Progressive era would see new demands for wealth redistribution and stronger federal regulation of corporate power. These populist demands would be embodied in the passage of the Sixteenth Amendment establishing the income tax and the Seventeenth Amendment allowing direct election of U.S. Senators, which would each further these goals and restructure federalism.

A federal income tax was recognized as more than a revenue source; by deciding who was taxed and who was not, it would be a tool of regulation by the federal government of the economy as well. As conservative Seventh Circuit Judge Frank Easterbrook said at a Federalist Society event in 2006, bemoaning this change:

The Sixteenth Amendment gave the federal government the power to control one hundred per cent of the entire economy. It can tax income. It can not tax income - achieving its goals via tax expenditures, that is - by encouraging those things that aren't taxed. It can tax and then subsidize using the dollars that it's just collected from you, or it can grant the dollars back on condition. So that combination of powers… gives the federal government control over almost anything it chooses to control.

If the Sixteenth Amendment changed the budgetary nature of federalism in favor of federal authority over economic activity, the Seventeenth Amendment, which required the direct election of U.S. Senators, changed the political nature of federalism. Structurally, “states rights” had their strongest embodiment in the original Constitutional clause that allowed state legislatures to control the election of Senators, meaning that those Senators would beholden to the institutional interests of state governments.

The direct election of U.S. Senators, joining the direct election of Congressional Representatives, meant that the federal government was now responsible directly to the individual voter and only to the individual voter. In The Seventeenth Amendment and the Death of Federalism, Professor Ralph A. Rossum notes, again unhappily from his conservative viewpoint, that "the original federal design has been amended out of existence and is no longer controlling—in the post-Seventeenth Amendment era, it is no more a part of the Constitution [than] the Constitution’s original fugitive slave clause."

While conservative courts would resist this progressive constitutional revolution for two more decades the New Deal courts would finally establish the broad principle that popular power expressed at the federal level would trump corporate interests.

Contradictions in “States Rights” Rhetoric: The fundamental contradiction in conservative constitutional arguments over federalism is that, even as some activists try to ignore every Amendment after the Tenth to sustain their attacks on federal authority, many other conservative activists, including many in the Tea Party movement, are agitating to repeal the Sixteen and Seventeen Amendments precisely because they admit those later Amendments have eliminated the original limits on federal authority. And this regret about the passage of the 17^th Amendment extends even to conservatives on the Supreme Court; in a speech reported in the Harvard Crimson in 2004, Supreme Court Justice Antonin Scalia said that the 17^th Amendment was “a bad idea.” Ultimately, conservatives can’t claim the enduring importance of the Tenth Amendment while denouncing the later constitutional amendments that superseded it.

Resources
Brennan Center for Justice - A New Birth of Freedom: The Forgotten History of the 13th, 14th and 15th Amendments
Professor Ralph A. Rossum - The Seventeenth Amendment and the Death of Federalism
Federalist Society - Are Constitutional Changes Necessary to Limit Government?

Conservatives are Hypocrites in Using Federal Power to Undermine State Authority

Beyond the false history and contradictions involved in conservative constitutional rhetoric, the reality is that conservatives in history and today have never respected state authority when it is marshaled on behalf of progressive policies. In fact, despite conservative constitutional history mythology, right-wing legal decisions preceding the New Deal were incredibly hostile to state authority, striking down a series of state laws from the minimum wage to railroad regulations in the name of federal supremacy, preempting any state law that came close to any area of presumed federal authority (whether Congress had created a law in that area or not), and more generally circumscribing state authority under a doctrine called "substantive due process."

Right-Wing Legislative Assault on State Authority: In the present, nothing illustrates the hypocrisy of the conservative movement on federalism more than the current debate on cracking down on abuses by the financial industry. Early in this past decade, state predatory lending laws which sought to limit abuses by subprime lenders were shut down by the Bush Administration using the club of federal power, yet conservative groups largely supported that wildly destructive attack on state authority. And when progressive federal leaders sought to restore greater authority to state legislatures and attorneys general to target abuses in their states by national banks, conservative elected leaders and organizations lined up to support amendments to undermine that increased state authority over local financial abuses.

As we have described in the past, this is just part of a multi-decade fight by the conservative movement to undermine state authority to act on behalf of workers, consumers, civil rights and environmental protection. In fact, the conservative majority in Congress voted over 57 times between 2001 and 2006 to preempt state laws, including action to preempt state limits on air pollution, to preempt state regulation of contaminated food, and to block tougher state regulation of Internet "spam."

The Conservative Legal Assault on State Authority: With pro-corporate appointments to the courts by conservative Presidents, courts not only upheld the preemption of local predatory lending laws, but supported the overturning of pro-union state laws, radically reduced punitive damages against Exxon-Mobil approved under state law, and exempted medical device manufacturers from liability under state laws if the FDA approved the device.

And this hypocrisy on federalism extends to groups supposedly speaking on behalf of state interests, including the American Legislative Exchange Council (ALEC). In multiple legal briefs, ALEC has called for using federal law and the federal Constitution to overturn state laws - from striking down Chicago gun regulations to forcing Michigan to allow mail-order wine sellers to sell to their residents from out-of-state to overturning a Massachusetts state law that prohibited state agencies from doing business in Burma.

Conservative Health Care Proposals Highlight Hypocrisy: Nothing highlights this conservative hypocrisy on state authority more than the health care debate. Even as the right-wing denounces the recent federal health reform law as violating state authority, the main planks in conservative health proposals proposed by Congressional leaders have been far clearer attacks on state authority.

When conservative leaders controlled the U.S. House of Representatives, they repeatedly approved bills allowing insurance companies to sell across state lines and ignore local state consumer protections. “These plans will undermine state insurance reform efforts designed to spread costs broadly,” noted Ami Gadhia from Consumers Union, publisher of Consumer Reports, at the time.

Similarly, the other most touted reform proposed by conservative leaders has been to override state medical malpractice laws through "tort reform" where patients would lose legal rights they previously had under individual state law. When President Bush was touting “medical malpractice reform,” the National Conference of State Legislatures emphasized its opposition to “any federal preemption of state authority within the civil justice and tort law areas” and the “voiding of state authority and the hard work of so many state legislatures.”

Resources
Progressive States Network - The Predatory Lending Bubble and How the Feds Made it Worse
Progressive States Network - The Assault on the New Deal Preemption Standard
Progressive States Network - Hypocrisy of "State Rights" Conservatives on Health Care
U.S. House Oversight and Government Reform Committee - Congressional Preemption of State Laws and Regulations
Open Salon- What the Right Won't Admit About Tort Reform

Progressives Promote a Collaborative Federalism that Respects State Authority

Progressives should proudly contrast their far more consistent respect for state authority. While progressives support strong minimum federal standards of protection for individuals and communities, they also far more consistently protect state authority and strengthen state capacity to take action to meet local needs and goals beyond those minimal standards.

The New Deal and The Great Society Strengthened Regulatory and Budgetary Capacity of States: The New Deal may have strengthened federal action, but it also specifically empowered states to act in areas like the minimum wage and child labor, which previously had been blocked by federal courts, and the New Deal Supreme Court was far more willing to allow states to regulate in areas where the federal government was also taking action.

As we have detailed, progressives have always made strengthening the budgetary capacity of states to act on local problems more effectively a priority. Under the Great Society, for example, grant-in-aid programs from DC to the states increased 68% in real dollars between 1964 and 1968. Notably, the federal recovery act promoted by President Obama last year directed most of its dollars not through direct federal programs but through the states where local leaders would have the flexibility to use those dollars to address state budget and job development needs.

Obama Administration Strengthened State Authority: On the regulatory front, the Obama administration last year emphasized its new commitment to respecting state regulatory rules by issuing a broad Memorandum on Preemption to all heads of executive departments and agencies, ordering them to avoid the preemption language routinely included in Bush-era regulatory preamble statements or in codified regulations unless there is "full consideration of the legitimate prerogatives of the States and with a sufficient legal basis for preemption." This commitment to respecting state authority was embodied in the administration’s recognizing the authority of California and thirteen other states and the District of Columbia to take action on “clean car” regulations – state action blocked by the previous administration – and incorporating those state standards into its own plan for tighter auto emission and gas mileage standards.

New Federal Health Care Law Embodies Collaborative Federalism: As an example of progressive federalism, even as the new federal law provides for stronger minimum standards for health care, it was designed to give great flexibility to states on how implementation would work in each state and was designed to strengthen the capacity of states to address specific local needs.

As the National Academy for State Health Policy describes, “States will have a significant role in the implementation of federal health reform.” This includes flexibility in how to design the health exchanges where consumers will purchase insurance, full preservation of state authority to establish stronger consumer protections than any federal standards, and even the ability to opt-out of the whole federal system where states can demonstrate a plan to achieve the goals of broader coverage more effectively. This latter option, described in the bill's Sec. 1332, makes it possible for states to combine all available subsidies that would normally flow to individuals and businesses into an alternative state system.

Resources
Progressive States Network - Restoring State Authority: An Agenda to Restrict Preemption of State Laws
Progressive States Network - Obama Affirms Importance of State Policy Innovation by Making California Emissions Rules a National Standard
David Walker - The Rebirth of Federalism
The White House - Memorandum on Preemption
National Academy for State Health Policy - Supporting State Policymakers' Implementation of Federal Health Reform

Highlighting the Progressive Model of Collaborative Federalism

What this history emphasizes is that progressives need to more aggressively challenge conservative posturing that they are the defenders of federalism. Progressives can highlight not only that conservatives promote a false history to justify their attacks on health care and other legislation, but they also practice a deep hypocrisy in failing to respect the state authority when they themselves control the levers of federal power.

Progressives should more clearly highlight the principles of collaborative federalism that have been embodied in progressive practice since the New Deal:

respect state regulatory authority to take action beyond minimum federal standards;
provide federal funding to strengthen state capacity, and;
design federal programs to allow flexibility in state implementation to meet local needs.

Ultimately, the American debate over federalism was never supposed to be about “states rights” – as if the rights of one specific government body over another was some sacred principle – but rather about how best to embody the will of American voters to address national goals while preserving the flexibility and liberty to meet specific local needs within that national framework.

The rigid legalistic federalism promoted by the right is wrong not only on historical grounds, but also because it fails to provide a practical framework for addressing the creative tension between national goals and local needs. Instead, the progressive model of collaborative federalism continues to be the only framework to address that tension and which reflects the rich tradition of constitutional reform that has brought this nation from its founding through the Civil War to the New Deal and into the present day.

State Broadband Awardees May Apply For Additional Funds

Fabiola Carrion — Thu, 10 Jun 2010 16:51:25 -0400

State governments may seek additional funding for up to three additional years on broadband projects. The announcement comes from the National Telecommunications and Information Administration (NTIA) who recognized that "better data and strategic planning are needed on the state level.

Launched last year, NTIA's State Broadband Data and Development Grant Program assists states in gathering data on the availability, speed, and location of broadband services. Originally funded for a two-year period, it has now been extended to five. States can now apply for three additional years of mapping and data collection work, as well as other initiatives, including state broadband task forces or advisory boards, technical assistance programs, local or regional technology planning efforts, and programs to promote increased computer ownership and Internet usage.

As we detailed in a previous Dispatch, the American Recovery and Reinvestment Act apportioned billions of dollars in funding for state broadband initiatives, of which more than $100 million in grants have already been distributed. One example of these efforts is Maine's "Three-Ring Binder" network, which was launched thanks to $25.4 million awarded by the NTIA to reach the under-served and unserved rural areas of Maine. Rep. Cynthia Dill introduced LD 1778 to classify dark fiber as a utility and broadband provider to create a broadband sustainability fund to support "last mile" high-speed Internet infrastructure.

What States Gain and Lose Under Proposed US Senate Climate Change Bill

Fabiola Carrion — Mon, 17 May 2010 12:45:53 -0400

After years of states leading the fight to promote clean energy and reverse climate change and the House passing an energy bill last year, U.S. Senate leaders have finally introduced climate change legislation, the American Power Act (APA). The bill is lengthy and complex with compromises that many leading environmental groups object to (see Greenpeace and Friends of the Earth for examples of statements by major organizations and coalitions criticizing the bill), although other groups (see Center for American Progress, Apollo Alliance, Environment America, Blue Green Alliance and Natural Resources Defense Council) have more positive evaluations of the bill as a flawed, but important step forward.

The proposed Senate bill includes a wide range of provisions, including a cap and allowance on greenhouse gas emissions, a target for reducing those emissions to 17% below 2005 levels by 2020 (and 80% below by 2050), and a fee for "carbon leakage" on imports to level the playing field between American manufacturers and foreign competitors that emit climate change-inducing carbon. For more bill details, the NRDC has a comprehensive initial summary of provisions here.

The impact of the federal bill on state government efforts to promote clean energy policy could be profound, with at least three major effects:

State cap and trade programs would be eliminated, potentially replaced by weaker federal rules, albeit ones covering more states.
The federal government would provide additional funding for states’ efforts to develop renewable energy sources, including funding for the smart grid.
States would have greater financial incentives to engage in off-shore drilling while also gaining greater protections if they want to opt out of off-shore drilling.

State Cap and Trade Programs: Long before federal efforts, states created their own cap and trade initiatives, which will be shut down under the federal bill and replaced by a national system more favorable to polluting industries. The first cap-and-trade government program was the Regional Greenhouse Gas Initiative (RGGI), composed by 10 Northeastern and Mid-Atlantic states. To date, eight auctions have taken place under RGGI and the revenues have been reinvested in energy-efficiency initiatives and innovations. Other states in the West and Midwest have similar regional cap-and-trade programs.

Although a federal standard is necessary, an RGGI official stated, “you don’t want to preempt states who can go further and become a model for the country.’’ Preemption would be extremely damaging to states that depend on the clean energy economy to create more jobs and reduce the high levels of pollution. Thanks to the allowances operating in these states, hundreds of millions of dollars have already been raised to create jobs and help homes and businesses become more energy efficient. While there are promises in the Senate bill to compensate states for those losses, it is unclear how complete that compensation will go.

More positively, state authority to set vehicle standards is retained, as is authority to establish clean energy, energy efficiency, and other greenhouse gas control programs with higher standards than federal requirements.

Funding for Renewable Energy Programs: The Act supports state renewable energy programs by promising that a percentage of the revenues raised by allowances be distributed to the states. APA recommends the development of energy efficient buildings (see PSN’s Green Buildings Shared Agenda), as well as renewable electricity incentives, gas utility efficiency programs and smart appliances. The bill also defines the smart grid and promotes its development in the states, including the integration of renewable energy resources and distributed generation, demand response, demand-side management, and system analysis. For a detailed analysis on how the smart grid and other technologies build a green economy, click here.

Off-Shore Drilling and the States: In response to the catastrophe caused by the oil spill in the Gulf of Mexico, the bill now includes two restrictions to off-shore drilling. First, states can opt-out of drilling up to 75 miles offshore. Second, states can veto the drilling plans if they “suffer significant adverse impacts in the event of an accident.” On the other hand, the bill offers large financial rewards to states that allow offshore drilling, with 37.5 percent of royalties from new offshore rigs directed to states, and 12.5 percent of royalties would be deposited in the Land and Water Conservation Fund for federal and state parks and land acquisition. With hard-pressed state budgets, many environmental leaders see these provisions encouraging states to take reckless risks to allow drilling near their states.

A Preemption Dilemma for State Leaders: Many of the states that have pioneered green energy programs are left in a confusing position. On one hand, the bill offers general support for states to run renewable energy programs, but on the other, it will prevent those states who were first to adopt comprehensive energy solutions to fulfill their cap and trade programs and will preempt them from taking some additional steps in regulating destructive industry practices. Many federal environmental laws have long allowed states to adopt standards that are more stringent than federal policies, so any preemption of state initiatives that cap greenhouse gas emissions is a step backwards that should be reevaluated as debate on federal legislation moves forward.

Resources:
American Power Act
Center for American Progress - American Power Act Empowers Americans: An Examination of Benefits to Americans in the Clean Energy Bill
Natural Resources Defense Council - Offshore Drilling Provisions Are Insufficient to Protect Oceans and Coastal Communities
Natural Resources Defense Council - The American Power Act: “First Read” of the Kerry-Lieberman Climate and Energy Legislation
Blue-Green Alliance - Labor-Environmental Partnership Urges Senate to Pass Comprehensive Climate and Clean Energy Legislation to Create Jobs and Make America the Leader in the Global Clean Energy Economy
Environment America -New Draft Climate Bill Takes Critical Steps Forward, But Must Do More to Get America Off Oil
Greenpeace - Kerry-Lieberman Dirty Energy Bailout Bill Not the Solution America Needs
Friends of the Earth - American Power Act: Threatening to Stymie Fight against Global Warming
Apollo Alliance - Apollo Alliance Urges Passage of Comprehensive Federal Clean Energy, Good Jobs Plan as Sens. Kerry and Lieberman Introduce New Bill
Progressive States Network - Returning Cap-and-Trade Revenue to Consumers Recommended in California
Progressive States Network - Climate Justice: Promoting Equity in Dealing with Climate Change
Progressive States Network - Multi-State Shared Agenda: Green Buildings
Progressive States Network - Networking the Green Economy - How Broadband and Related Technologies Can Build a Green Economic Future

Financial Reform: Keep State AGs and State Law on the Beat Against Predatory Lending Practices

Nathan Newman — Mon, 10 May 2010 12:22:39 -0400

As Congress debates federal financial reform legislation, a key priority for financial industry lobbyists remains gutting provisions that would strengthen enforcement by state attorneys general and stopping the partial restoration of state powers to regulate national bank abuses against consumers. As we detailed three years ago, much of the damage to communities from subprime lending might have been avoided if the Bush Administration had not been able to shut down most state anti-predatory lending laws early in the decade.

Strengthening state power to regulate abuses by national banks has been a priority for reformers from the beginning of the financial reform process. While the bill approved in the House and the current leadership proposal in the Senate are not as strong in preserving state enforcement powers as some early proposals, under them state attorneys general would still retain the power to enforce federal law against national banks. Federal authority to preempt state banking laws would also be more limited than under our current laws. One broad amendment to keep current bad federal preemption of state banking laws was rejected last Thursday, although most conservative Senators voted for it. (Note that "states' rights" inevitably lose out in conservative hands when corporate interests want federal power to trump state regulations).

Stopping Bad Senate Deals on Preemption: Newspapers continue to report on deals being negotiated between conservative Democrats and Republicans to undermine state regulatory authority, even as national consumer leaders continue to speak out against any further preemption compromises. A letter sent to Senators on Friday by Americans for Financial Reform, a coalition made up of over 250 consumer, labor and civil rights groups, highlights the key arguments for why expanding state authority is so critical, including:

"Help from state AGs is critical to ensuring that consumers have at least minimum protections against reckless Wall Street practices. In addition, consumers are much more likely to complain to, and get a response from, state-based enforcement agencies."
"States need to be able to address new problems before they spread nationally, without waiting for federal regulators to notice them and respond... States that had tough anti-predatory lending laws (until they were preempted) had lower foreclosure rates than states without those laws. After state laws were preempted, national banks made riskier loans."
"It is critical to require a case-by-case assessment of state laws for purposes of federal preemption rather than permitting state laws to be wiped out broadly without due consideration for each law... the protections in the bill against excessive preemption need to be strengthened, substantively and procedurally, to ensure that the [federal government] must undertake a serious inquiry and not a pro forma one."

With critical votes happening all this week, Americans for Financial Reform has an action page with key alerts and tools for contacting Congress to express the need for real financial reform, including keeping authority in the states to protect consumers from national bank abuses.

Resources:
Progressive States Network - The Predatory Lending Bubble and How the Feds Made it Worse
Progressive States Network - Protecting State Consumer Protection from Preemption in Federal Financial Reform
Americans for Financial Reform - Elizabeth Warren and Attorney General Lisa Madigan Speak Out Against Preemption Deal
Americans for Financial Reform - Keep State Attorneys General On The Predatory Lending Beat: Oppose Amendments To Further Preempt State Authority

Recovery Act Boosting Economic Performance and Providing Middle Class Tax Relief

Altaf Rahamatulla — Thu, 29 Apr 2010 12:15:36 -0400

The Council of Economic Advisers (CEA) recently released its third quarterly report on the impact of the American Recovery and Reinvestment Act (ARRA). The report generally confirms what economists across the board have concluded: the Recovery Act has prevented a full economic collapse; generated millions of jobs; boosted national economic performance; and provided sorely needed state fiscal relief.

The CEA estimates ARRA has created or saved between 2.2 and 2.8 million jobs, nearly half of which have been enabled by the tax relief and income support provisions of the law. The report also finds that as a result of the Recovery Act:

government investment in high-growth areas, including infrastructure and clean energy, increased $16 billion in the first quarter of 2010;
real GDP began rising in the third quarter of 2009 and payroll employment started to increase in the first quarter of 2010;
first quarter GDP in 2010 is between 2.5 an 2.9 percent higher than what it would have been; and
approximately $110 billion in tax relief and $90 billion in other income support, like unemployment benefits and food assistance, directly benefited middle and lower income families

The last point is critical. Not only has ARRA positively impacted the economy, it has offered real relief to working families in a time of extreme economic hardship. As CEA Chair Christina Romer, relates, “[i]n addition to shoring up the overall economy... the Recovery Act has made a real difference in the lives of families. The broad set of tax cuts and income supports enacted last year have clearly boosted consumption and employment growth in a way that has been absolutely essential.” The table below illustrates that ARRA's tax relief provisions are predominantly directed towards the middle and working class and have helped reduce these families' tax burdens to the lowest levels they have been in decades.

Resources:
Center on Budget and Policy Priorities - Federal Income Taxes on Middle-Income Families at Historically Low Levels
Council of Economic Advisers - The Economic Impact of the American Recovery and Reinvestment Act of 2009: Third Quarterly Report
Progressive States Network - 2.4 Million Jobs Supported by the Recovery Act - and a Depression Averted
Progressive States Network - Take Action: Additional Federal Job Creation and State Fiscal Relief Needed
The White House - New CEA Report Finds Recovery Act Already Responsible for about 2.5 Million Jobs

2.4 Million Jobs Supported by the Recovery Act - and a Depression Averted

Altaf Rahamatulla — Thu, 18 Feb 2010 12:27:25 -0500

This week marks the one-year anniversary of the passage of the American Recovery and Reinvestment Act (ARRA). The annual report by the White House task force monitoring the impact of ARRA funds, led by Vice-President Joe Biden, finds that up to 2.4 million jobs have been created or saved in both the public and private sector as a result of federal recovery efforts.

The Vice President's report describes the importance of state fiscal relief as a critical component of job creation efforts. This includes supporting 300,000 education jobs across the country:

The money is allowing state governments to pay teachers (hundreds of thousands across the country according to reports filed from state governments), firefighters and police officers and is also preventing states’ budget gaps from growing wider. And those hardest hit by the recession are getting extended unemployment insurance, health coverage, and other assistance to get through these tough times. This money goes to state governments and families in need, without red tape or delays, and was designed to be the quickest acting mechanism to save our economy from the brink of a second Great Depression... And without these payments, those hurting the most in our country would have found themselves in even greater need, and our economy would have suffered much greater damage.

This is all the more reason legislators from around the country are signing onto PSN's letter supporting more state fiscal relief as the most effective way to continue to boost the economy.

Some of the other important accomplishments of the Recovery Act include:

95 percent of working Americans saw a tax cut that immediately boosted consumer spending ability.
Money has been allocated to programs and projects ahead of schedule with unprecedented transparency-- with 160,00 reports from recipients on ARRA funds submitted and made public.
12,500 transportation construction projects have been funded, while 11,000 bus and rail vehicles have been purchased with ARRA funds.
12,000 cutting-edge medical research projects at research and educational institutions in states across the country have been supported.
Smart Grid funding is modernizing the electricity grid, including the deployment of 18 million smart meters and 877 digital sensors in the U.S. transmission system.
143,422 housing units have been rehabbed or developed to create jobs and improve the living standards in urban areas of the country.
State and local governments have issued $70.8 billion in Build America Bonds to provide needed capital for school construction, water projects and infrastructure development.

The following map details the number of jobs created or saved by the recovery act in all states.

Source: White House.gov - Annual Report to the President on Progress Implementing the American Recovery and Reinvestment Act of 2009

As we have explained in previous Dispatches, the implementation of the Recovery Act has alleviated the severity of the recession, created jobs, kept millions of families out of poverty, and helped mitigate state budget deficits.

Economists across the ideological spectrum have extolled the benefits of the recovery efforts. In a September 2009 speech, Christina Romer, Chair of the Council of Economic Advisers, confirmed that, "[p]roviding $787 billion of tax cuts and spending increases [is] the boldest counter-cyclical fiscal expansion in American history." Mark Zandi, former economic adviser to Senator John McCain's presidential campaign and chief economist at Moody's Economy.com, finds that the Recovery Act was key to the 5.7 percent GDP growth in the last quarter of 2009. Furthermore, he states, "[t]he world would be measurably worse if not for [the ARRA]... We'd be talking about a depression."

The accompanying graphic from the Economic Policy Institute highlights the dramatic shift in monthly job losses before and after the passage of ARRA.

Source: Economic Policy Institute - The Recovery Act Worked

Resources:
Council of Economic Advisers - The Economic Impact of the American Recovery and Reinvestment Act of 2009 Second Quarterly Report
Economic Policy Institute - The Recovery Act Worked
Mark Zandi - The Impact of the Recovery Act on Economic Growth
The New York Times - Judging Stimulus by Job Data Reveals Success
PSN - Take Action: Additional Federal Job Creation and State Fiscal Relief Needed
White House.gov - Annual Report to the President on Progress Implementing the American Recovery and Reinvestment Act of 2009

Eye on the Right: Opposing the Recovery While Taking Credit for the Results

Altaf Rahamatulla — Thu, 18 Feb 2010 12:15:43 -0500

How do we know the Recovery Act is working?

Over 70 members of the House of Representatives vociferously opposed ARRA, but returned to their home districts to take credit for job creation, investments in infrastructure and the green economy, and spending on critical community needs. Many of these same lawmakers requested further federal funds for projects in their states.

Although Pennsylvania Rep. Bill Shuster was against federal recovery efforts, he attended a groundbreaking cermony for a sewage treatment plant funded by ARRA. He additionally requested that Gov. Ed Rendell utilize recovery money to reopen a school for veterans' children, claiming it would "save about 134 full-time jobs."
Texas Rep. Michael McCaul stated, "I didn't support final passage but at the same time I wanted to make sure if we are spending that kind of money that much of that gets directed to Texas." Along with the Texas Congressional delegation, he also requested that Obama's administration direct $3 billion in unused recovery dollars to fund NASA's manned space program.
South Carolina Rep. Joe Wilson, of "You lie" fame, voted against ARRA, but sent a letter to U.S. Secretary of Agriculture Tom Vilsack requesting recovery funds for a foundation in his state.
An outspoken opponent of federal recovery efforts, House Minority Whip Rep. Eric Cantor met with transportation officials to explore how Virginia could apply for high-speed rail funds though ARRA. On top of that, in November 2009, Rep. Cantor held a job fair that featured almost 15 organizations that received aid from the Recovery Act.

At the state level, there are conservative Governors who also opposed ARRA, but have included recovery funds in their budget proposals this fiscal year. Minnesota Gov. Tim Pawlenty previously bashed the Obama Administration and criticized the idea of utilizing federal recovery funds for state fiscal relief, but includes ARRA as a critical portion of his budget proposal. In fact, "[n]early one-third of the governor's budget fix would rely on $387 million in federal stimulus money." Virginia Gov. Bob McDonnell, a persistent critic of the recovery act during his campaign, has touted $24 million in federal funds for health care information technology made available for the state through ARRA funding.

The blatant hypocrisy of these right-wing officials is quite telling. At the basic level, this indicates an inherent acknowledgment that pumping federal funds into the economy creates jobs and fosters growth. The right's deceptive rhetoric is a stark reminder of the hollowness of their failed economic, tax, and budget policies.

Resource:
The Washington Times - Stimulus foes see value in seeking cash

Job Creation and State Fiscal Relief Resolutions Moving in the States

Altaf Rahamatulla — Thu, 11 Feb 2010 12:12:03 -0500

In the State of the Union speech, President Barack Obama stated:

"The devastation remains. One in 10 Americans still cannot find work. Many businesses have shuttered. Home values have declined. Small towns and rural communities have been hit especially hard. And for those who'd already known poverty, life has become that much harder... That is why jobs must be our number-one focus in 2010, and that's why I'm calling for a new jobs bill."

With the fiscal crisis forcing states to layoff hundreds of thousands of teachers, nurses and police officers, the need for more federal job creation and state fiscal relief support is clear. And there is substantial momentum building around this issue in the states.

New Mexico Rep. Eleanor Chavez introduced HJM39, a joint memorial calling on the federal government to pass a jobs creation plan. The memorial passed the House of Representatives last Saturday and will now be considered by the state Senate.
Similar resolutions are likely to be introduced in Illinois, Nevada and Vermont. Members of the Tax Fairness Organizing Collaborative (TFOC), including New Yorkers for Fiscal Fairness (NYFF) and the Progressive Leadership Alliance of Nevada (PLAN), are working with lawmakers in their states to highlight the acute need for increased federal support.
Along with Maine Senate President Libby Mitchell, House Speaker Hannah Pingree held a press conference this past Tuesday to garner awareness of Maine's economic and fiscal situation and highlight the need for another round of federal aid.

If you are a lawmaker interested in introducing a resolution requesting the federal government to move a jobs bill, PSN can assist you in that effort. Please contact us at jobcreation@progressivestates.org for support. General resolution language can be found here.

Additionally, over one hundred legislators from thirty-one states have signed on to Progressive States Network's letter calling on the President and Congress to move swiftly on job creation and state fiscal relief. State lawmakers can sign onto the letter here, while citizens and advocates can use this online tool to contact their state legislators and ask them to add their signature.

The Need and Public Support for Action: As we discussed in January, the passage of the American Recovery and Reinvestment Act (ARRA) in early 2009 was critical in preventing a full collapse of the national economy and helping states address huge budget gaps. The Congressional Budget Office (CBO) estimates that the ARRA created or maintained 600,000 to 1.6 million jobs as of September 2009 and found it decreased the unemployment rate by almost one percentage point. Unfortunately, millions of Americans are still out of work and states are struggling to find ways to deal with enormous deficits and plummeting revenue. Projected governors' budgets could lead to layoffs amounting to an additional 900,000 jobs lost in the economy.

There is extensive bipartisan support for federal funding for job creation and aid to states. Winthrop University conducted a poll in late 2009 and found that 71.6 percent of respondents favor funding for jobs (94.5 percent identify as Democrats, 53.4 percent Republican, 68.9 percent Independent) and 62.7 percent support "giving aid to states in serious financial trouble" (80.6 percent Democrat, 50.9 percent Republican, 63.6 percent Independent).

As the U.S. Senate moves on a jobs package within the next few weeks, timing is crucial. State lawmakers must send a strong message to Washington that the country needs jobs and states need relief.

Resources:
Center on Budget and Policy Priorities - Additional Federal Fiscal Relief Needed to Help States Address Recession's Impact
Center on Budget and Policy Priorities - Recession Continues to Batter State Budgets; State Responses Could Slow Recovery
Stateline.org - Economist Mark Zandi: On stimulus, jobs, state finances, inflation and the year ahead
Moody's Analytics - The Case for Another Round of Federal Aid to State & Local Govt
WhiteHouse.Gov - Remarks by the President of the United States in State of the Union Address
Winthrop University - Winthrop Poll Results - November 2009 Findings
Center on Budget and Policy Priorities - Governors’ New Budgets Indicate Loss of Many Jobs if Federal Aid Expires