As chief executive of a county with a budget larger than 16 states, I’ve seen and successfully managed through some challenging situations. But during the current economic crisis, I'm doing everything wrong.
Like Governor Paterson and Mayor Bloomberg — and hundreds of governors and local leaders across the nation who are responding to rising costs, shrinking revenues, and massive projected budget deficits — I’m cutting jobs, eliminating programs, and in the case of Nassau County, reducing capital spending and raising property taxes for the first time in five years. We have to. Because unlike the federal government, states and localities must, by law, balance our budgets every year, leaving us no choice but to make difficult decisions. These efforts are necessary in the short term, but we are undoing any national efforts to stimulate the economy.
In the war to save America’s economy, the local, state, and federal governments are all on the same side but pulling in opposite directions.
State and localities need our federal government’s help. As Governor Paterson so articulately made the case just one month ago on Capitol Hill and again earlier this week, the American public needs Washington more than any time in recent memory. Hundreds of billions of dollars are being spent to bail out banks, insurance companies, mortgage firms, and maybe even the automobile industry. Why can’t Washington spend $50 billion to help the beleaguered American taxpayer by stabilizing their state and local governments?
We are in a promising position with an incoming president who has been given a clear mandate to take dramatic action on a number of fronts, starting with our fragile and faltering economy. Just last week we learned President-elect Barack Obama will have access to $350 billion of the federal bank bailout funds. Given that Congress is still unclear as to how that money can and should be used, it seems reasonable to offer some concrete suggestions.
President-elect Obama’s National Infrastructure Reinvestment Deal, reminiscent of President Roosevelt’s New Deal, would invest $60 billion over 10 years in roads, bridges, and other infrastructure projects across the country. An excellent idea and one that should be pursued, but it has two major shortcomings for dealing with the current economic crisis. First, it will take time to get it up and running, with any short-term benefits offset by all the “wrong” things local governments are being forced to do. Second, with great variations in investments state-to-state, depending on who has a local Robert Moses with pending projects in hand, it is highly inequitable.
My proposal will get the federal, state, and local governments working together on the same side. It deals directly with America’s Medicaid program and will provide immediate budgetary relief for states and, where applicable, local governments that contribute to the cost of the program. Just as important, it also fulfills a major policy commitment by President-elect Obama to develop a national health insurance plan. And given the rising numbers of unemployed Americans, this proposal provides a framework for preserving health coverage for the unemployed.
