Schumer to GOP Govs: No A La Carte

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Just released from Sen. Schumer’s office …

Schumer to GOP governors: Stimulus isn’t a la carte menu

WASHINGTON, DC–Senator Charles Schumer released the following letter Tuesday urging the Obama administration to notify governors that they must certify acceptance of stimulus funding in full or not at all, rather than selectively approving and rejecting the law’s various components.

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.

Sincerely,

Charles E. Schumer
United States Senator

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Josh Marshall is editor and publisher of TalkingPointsMemo.com.
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