Schumer Pushes Back, Throws States Rights Argument Out The Window

The states refusing stimulus money -- all or part -- are tryint to show a little fiscal responsibility that the Fed will not. Now Porker Schumer says ya can't do that. It's our way or the highway.

At Red State:

Washington Becomes Rome
Senator Schumer Holds States Hostage to Porkulus

Posted by Erick Erickson (Profile)
Tuesday, February 24th at 12:20PM EST

Chuck Schumer wants the White House’s Office of Management and Budget to tell states they have no choice in the use of porkulus funds.

Below the fold is the entire letter. It’s is amazing in its reach. In effect, states will have zero discretion in how they spend the money and which parts they take.

This stems from Gov. Bobby Jindal and others saying they would not take the whole package because some parts would force state tax increases to comply with the terms of Porkulus.

Schumer says that’s tough. States will be forced to increase taxes and take 100% of the money if he has his way. And the states will have no discretion.

For instance, at least two governors have proposed rejecting a program to expand unemployment insurance for laid-off workers. Economists consistently rank unemployment insurance among the most efficient and cost-effective fiscal stimulus measures; by one frequently cited estimate, it provides an economic return of as high as $1.73 for every dollar invested. Thus, by denying this provision for their residents, these governors are not just depriving some of the neediest Americans of relief in a dire economy; they are undermining the overall stimulative impact of the package.

No one would dispute that these governors should be given the choice as to whether to accept the funds or not. But it should not be multiple choice.

This is breathtaking. It, in effect, makes the states servants of the federal government. States rights, etc. are out the window. And never mind that the unemployment insurance provisions would force taxes on the small businesses that are currently the only thing propping up the American economy.

This is how it is to be, folks — the federal Emperor and his Imperial Senate ordering fealty and servitude from the states. And if Washington does not get the fealty and loyalty, the states will
be cut off, their people hurt, their businesses shut down, etc.

Washington has become Rome. And with Barney Frank up there, we’ve even got the licentiousness and male prostitution rings. Next up: throwing Christians t the lions.

February 24, 2009

Dear Director Orszag:

In recent days, a small minority of governors, mostly Republicans, have publicly weighed the possibility of foregoing certain emergency provisions provided under the American Economic Recovery and Reinvestment Act signed last week by President Obama. I believe this prospect not only would undercut the stimulative effect of the recovery package, but also is inconsistent with a key provision included in the law passed by Congress. To protect the integrity of the recovery program, I urge the administration to issue implementation guidance clarifying that while any Governor may exercise his or her discretion to accept or reject the federal funds provided in the stimulus, no Governor should have the authority to arbitrarily adopt a select subset of the overall package.

As you know, Section 1607(a) of the economic recovery legislation provides that the Governor of each state must certify a request for stimulus funds before any money can flow. No language in this provision, however, permits the governor to selectively adopt some components of the bill while rejecting others. To allow such picking and choosing would, in effect, empower the governors with a line-item veto authority that President Obama himself did not possess at the time he signed the legislation. It would also undermine the overall success of the bill, as the components most singled out for criticism by these governors are among the most productive measures in terms of stimulating the economy.

For instance, at least two governors have proposed rejecting a program to expand unemployment insurance for laid-off workers. Economists consistently rank unemployment insurance among the most efficient and cost-effective fiscal stimulus measures; by one frequently cited estimate, it provides an economic return of as high as $1.73 for every dollar invested. Thus, by denying this provision for their residents, these governors are not just depriving some of the neediest Americans of relief in a dire economy; they are undermining the overall stimulative impact of the package.

No one would dispute that these governors should be given the choice as to whether to accept the funds or not. But it should not be multiple choice. The composition of the package was rightly dictated by economic considerations; we should not let the implementation of the package be dictated by political considerations. (that's funny coming from Schumer -- MR)

Sincerely,
Charles E. SchumerUnited States Senator