States Want Their Own Federal Financial Bailout

States Want Their Own Federal Financial Bailout

Led by California with a $28 billion hole in its budget, 41 states are in financial trouble, and many of their leaders are looking to Congress to bail them out.

State officials are hoping to join the ranks of the financial industry and auto manufacturers, who've found a sympathetic ear on Capitol Hill. They've found some key supporters: House Speaker Nancy Pelosi and other top Democrats are promoting aid to states as part of a broad stimulus package that could inject more than $300 billion into the ailing economy.

The idea is getting a strong bipartisan push from governors across the country, with California Republican Gov. Arnold Schwarzenegger and New York Democratic Gov. David Paterson among the chief proponents. Both are blaming Washington for their states' mounting troubles.

In a report released last week, the Center on Budget and Policy Priorities says that 41 states are facing budget shortfalls either this year, next year or both. The report says that states are facing "a great fiscal crisis" and their revenue projections are only weakening...The only states that managed to stay off the list are Texas, Alaska, Montana, Wyoming, North Dakota, South Dakota, Nebraska, Indiana and West Virginia.

Many Democrats want Congress to include infrastructure projects as part of a stimulus package.

That's also what the U.S. Conference of Mayors wants to do. On Friday, the mayors suggested a "Main Street" stimulus package, announcing that they'd identified 4,591 infrastructure projects that would cost $24.4 billion but would create more than a quarter of a million jobs in return.

November 15, 2008

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