For Immediate Release
Wednesday, January 22, 2003
Labor, Education, Political and Business Leaders Call For Bush to Change Economic Plan
Serious and Swift Changes Needed to Assist Ailing States
WASHINGTON —For the first time, a coalition of elected officials, labor, business and education leaders came together today to discuss the spiraling $189 billion fiscal crisis facing state and local governments. They detailed the ways the budget crisis is hitting hardest and outlined comprehensive solutions that could stimulate growth in the economy.
The briefing, sponsored by the American Federation of State, County and Municipal Employees (AFSCME) and the AFL-CIO, included AFSCME President Gerald W. McEntee, AFL-CIO President John Sweeney, New Jersey Governor James McGreevey, Los Angeles Mayor Jim Hahn, National Education Association President Reg Weaver, Chancellor of the University System of Maryland William (Britt) Kirwan and Roger Altman, Chairman of Evercore. They all called for President Bush to make drastic changes to his economic stimulus plan in order to rescue state and local governments from their current fiscal nightmare.
The states are suffering their worst financial crisis since World War II, with a $189 billion budget gap for the three Fiscal Years 2002-2004. The debt is still growing, much of it due to federally mandated programs. State Medicaid costs grew more than 13 percent last year, the biggest jump in nearly a decade. The Bush economic stimulus package does virtually nothing to help the states. The participants in today's briefing called on the President to make serious and swift changes to his economic stimulus plan so that the economy can be rescued from its downward spiral.
"You don't solve a lack of revenue by cutting revenue. Yet this wrong-headed solution is exactly what President Bush has proposed," AFSCME President Gerald W. McEntee said. "We must not accept another misguided plan that means nothing to the laid-off worker who can't make his mortgage payment, or the state university that has to increase tuition and close out deserving students, or the senior citizen who still has to choose between food and prescription drugs."
At the emergency briefing, McEntee and the other leaders challenged President Bush to include some common sense components that will stimulate the nation's devastated economy. The components are:
- Direct fiscal relief for state and local governments. State governments are already suffering their worst fiscal crisis in nearly 60 years, and cannot afford all of the federally mandated programs pushed upon them. Without real assistance from Congress, the situation will only worsen, and working families, especially those without jobs, will be left even further behind.
- Federal investments in critical infrastructure needs. By funding much needed highway repair, along with school construction and other repairs, the President will ensure that the nation's roads and schools are safe while creating jobs and spurring the economy.
- Adequate federal funding for critical domestic programs. The President must get resources into the hands of the nation's first-responders. Medicare costs are soaring and cash-strapped states cannot bear the entire burden, so the federal matching rate must immediately be temporarily increased. Education, homeland security and other critical programs must also be adequately funded.
"The President's proposal fails to deal with the root cause of the fiscal crisis. Our cities and states have a revenue problem, not a spending problem; massive tax cuts are not the solution. It's time to put politics aside and adopt a plan that will get the economy moving in the right direction," President McEntee said.
Members of Congress have introduced several positive proposals, ranging from $50-75 billion in new fiscal relief to America's states, cities, counties and localities. This week Senators Jay Rockefeller (D-WV), Ben Nelson (D-NE), Susan Collins (D-ME) and Gordon Smith (R-OR) are expected to introduce their state fiscal relief bill. The legislation will provide $20 billion in immediate assistance to state governments including a $10 billion in an increased federal Medicaid match and $10 billion in payments to Title XX Social Services Block Grant. The bill will be structured the same as the bill they introduced last year, which garnered 75 votes in the Senate.
