House and Senate Democrats Developing New Stimulus Plan

July 21, 2008

Speaker Nancy Pelosi and House Democratic leaders have been meeting with economists to develop a new stimulus plan and Speaker Pelosi said the plan was likely to include aid for states suffering declining tax revenues and help with the states' share of costs for Medicaid services to the poor as well as transportation infrastructure, public schools and other public facilities. Speaker Pelosi suggested a $50 billion package and said:

"our distinguished experts here say, again, something targeted, temporary, and timely, as were our criteria before, is very important... we can't have them [middle-class tax rebates] exclusively dominate the package.  We have to have assistance, direct assistance, in terms of the other issues that were named: Food Stamps, LIHEAP, and the issues that relate to infrastructure, Medicaid, aid to the states."

Senate Democrats announced they are developing their own stimulus plan. Emerging plans suggest a $50 billion package, which could include increased funding to states for their Medicaid costs, increased funds for the Low Income Home Energy Assistance Program (LIHEAP) to address skyrocketing energy costs and extended unemployment benefits longer than the 13 additional weeks enacted in the first stimulus package. While the details of these stimulus plans are expected this week, the House and Senate may not vote on these plans until after Labor Day, when Congress returns from its summer recess. AFSCME strongly supports increased stimulus funding to provide states and localities with fiscal relief, especially through increased Medicaid funding and flexible anti-recession grants.