Wednesday, June 30, 2010

Governors Fight to Save Their States... and the National Recovery

Double-dip recession? The words are certainly being uttered more and more, and it becomes a definite possibility if Congress doesn't pass the unemployment benefit extension and the Medicaid funding for the states. Since Congress appropriated this money in various forms before, 30 state governors felt free to base their budget plans on these incoming federal dollars. Thanks to obstruction from the Senate Republicans, those states now have to scramble to either raise taxes or make huge cuts in their budgets, the likes of which could be a severe drag on any recovery that is happening.

47 governors have signed a letter pleading with Washington to extend these programs. 47. Republican, Democrat, all asking for this pass. Today, a bipartisan group of governors traveled to DC to press the issue with lawmakers. Gov. Granholm previewed the implications for Michigan before she left...

Without the unemployment extension, 400,000 Michigan workers will lose their benefits by the end of the year. "If we have 400,000 people who can't make mortgage payments and can't put food on the table, what are the ramifications of that?" Granholm said.

The loss of Medicaid funding means $555 million in cuts will have to be made, Granholm said. Cuts to Medicaid pharmacy benefits, mental health services and nursing home services are all on the table, as is a further 35 percent reduction in the reimbursement rate to doctors who see Medicaid patients. A cut that drastic would mean physicians would likely stop seeing Medicaid patients all together, Granholm added.

And then she had to deal with Tweety. Keeping Matthews focused was difficult, but she managed it well. Watch the video. In it, President Obama calls out the Republican strategy -"If Obama fails, we win. If we just keep on saying no to everything, somehow people will forget who got us into this mess in the first place, and we'll get more votes in November".

Seems to be the Republican plan. And they are willing to take down the economy to do it. Gov. Granholm calls them out as well:

This afternoon, the Governor's Office released a more detailed list of the cuts we are facing - and the words "double-dip" came up again.

“Inaction on this issue will force this nation into a double-dip recession and strike another severe blow to our state,” Granholm said. “State budget cuts will have to be made that directly impact the well-being of Michigan citizens and their families.”

Granholm said closing the $560 million budget gap could mean:

• cuts of up to 30 percent in payments to physicians and other health care providers who treat 1.8 million Medicaid beneficiaries, further limiting access to quality health care and greatly reducing federal funds that flow in the state economy;
• additional cuts in mental health services;
• reductions in safety net programs that provide basic living expenses to more than 82,000 low-income families;
• further reductions in funding to local governments for critical services like police and fire protection;
• deeper cuts in state funding for colleges and universities.

And for the "just cut more!" crowd? We have a list of the cuts the state has already made. Besides resolving $10 billion in budget deficits and cutting more as a percentage that any other governor in the country...

“We now have nearly 11,000 fewer state employees than in 2001 and have negotiated more than $650 million in employee concessions,” Granholm said. “We’ve cut the number of state departments by 25 percent since 2003 and closed 14 prisons and prison camps. We’ve renegotiated state contracts, sold off excess property and improved energy efficiency to save another $1.5 billion.

Other cuts include:

• cut Medicaid provider rates by 8 percent and eliminate several optional Medicaid services;
• reduce mental health funding for Michigan citizens who rely on it by more than 15 percent last year alone;
• cut aid to Michigan cities, villages and townships by more than 16 percent since 2004, reducing funding for services like police and fire protection;
• reduce university funding by nearly 10 percent since 2002 while tuition costs have risen by 88 percent;
• cut student financial aid by $135 million last year, further impairing access to higher education.

Consumer confidence is falling, car sales are slowing, the jobs numbers are tepid at best - and now the Republicans want to prevent any economic recovery for political purposes. Let's hope that the governors got through to some people today, or get ready for the possibility that we go back into recession. And that won't be pretty. At all.

Like the President said, don't forget who got us in this mess, and don't forget who is preventing us from getting out.

And then vote accordingly.