Last week, we wondered if state and local governments were blunting the impact of the $787 federal stimulus by laying off thousands of employees. According to economic data, government payrolls have decreased by more than 200,000 jobs since the recession began. Now, President Obama is trying to convince Congress to approve additional funds for states and cities.
It's not an easy sell. Republicans have dug in their heels against additional spending, saying that the measures taken last year by the federal government should be enough to pull the country out of the recession and further spending would mean higher taxes in the future. And, while President Obama and some Democratic leaders are attacking Republicans for standing in the way, the GOP isn't the only problem.
Late last week, several Democrats said they were unwilling to support the jobs package before the Senate, which includes several administration priorities. Among them: provisions to revive emergency benefits for unemployed workers, which expired June 2, as well as $24 billion in state aid that Obama has called critical to averting "massive layoffs" of public-sector workers.
Why all the resistance, even from Democrats? Well, the spending bill would make the federal deficit jump even higher.
The package also would increase budget deficits by nearly $80 billion over the next decade. Sen. Ben Nelson (D-Neb.) said that's too much at a time when the total national debt is $13 trillion and rising. "The more we borrow on these important areas," he said last week, "the more I think we will retard the recovery period dramatically because of more deficit and debt."
It seems a little late in the game for lawmakers to still be having this debate. We need a unified approach to pulling the country out of the recession from state, local, and federal government. That's not what is happening right now. Instead, we have some states cutting spending (like New Jersey) and others talking about increasing taxes (Pennsylvania). Meanwhile, the federal government is locked in a never-ending debate over how much spending is appropriate.
What do you think? Which is more important-- cutting the deficit or increasing spending to create/preserve jobs? Let us know in the comments!