States press Congress, Obama for economic stimulus package

WASHINGTON — Facing financial woes at home, states continued to press Congress to boost the economy by giving federal money to folks they know will spend it: the unemployed, the poor and road builders, among others.

The pitch to House Speaker Nancy Pelosi, D-Calif., came from governors and legislators who want Congress to move quickly on an economic stimulus package.

At least 43 states are facing deficits that could total more than $140 billion over the next two years, said Pennsylvania Democratic Gov. Ed Rendell, who held a Washington news conference with Vermont Republican Gov. Jim Douglas and North Carolina House Speaker Joe Hackney.

Leading the way is California, where officials fear a $28 billion deficit by June.

"If Gov. (Arnold) Schwarzenegger were here, his deficit would make the three of us look like we're in fat city," Rendell said of California's Republican governor.

Congressional leaders and President-elect Barack Obama said they're committed to a stimulus package, but its details and price tag haven't been worked out.

Pelosi says she hopes Congress would be ready when lawmakers return to session early next year. Governors plan to meet on Tuesday with Obama in Philadelphia at the National Governors Association's annual meeting.

The state officials said they want a temporary extension of unemployment benefits, a hike in food stamp benefits and an increase in medical assistance programs like Medicaid.

One of their top priorities is funding for an estimated $136 billion in infrastructure projects — mostly roads, bridges and sewers — that states have indicated are "ready to go" or are no more than a few months from being started.

"States can move quickly to put this money on the ground," Hackney said. "The infrastructure projects are important because it's such a win-win."

A billion dollars in infrastructure investment translates into roughly 40,000 new jobs, economists say.

Rendell said governors had encouraged Pelosi to include a "use it or lose it" clause so states wouldn't sit on the money and it would have its intended impact of stimulating the economy.

States are hurting because of lower tax revenue and higher welfare payments. The state officials were quick to point out that they'd already made cuts at home and weren't seeking a bailout.

In North Carolina, Democratic Gov. Mike Easley has ordered 5 percent across-the-board cuts, and he also plans to fast-track more than $700 million in capital improvement projects to help stimulate the economy.

"States are not just coming to Washington with our hands out," Douglas said. "We're taking action at the state level to reduce our levels of spending and live within our means."


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