Congress Spending Billions to Bail Out States

Thursday, 05 Aug 2010 10:40 AM

By Ernest Istook

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Using the classic Washington fib that “It’s paid for,” Congress is spending an extra $26 billion to bail out state governments (who already got the lion's share of last year’s failed $787 billion “stimulus” bill).

The House will rush back from a six-week recess to spend the money next week — an urgency that they instead should show to fix the economy by removing the twin threats of Jan. 1 tax hikes plus a bundle of job-killing regulations.

The $26 billion won’t fix the jobs crisis in the private sector, but instead gives job security for public employees, especially teachers and others who are heavily unionized. And it gives states extra money for their Medicaid programs.

Sen. Harry Reid tweaked the bill’s formulas to send more money to Maine, which prompted its senators — Susan Collins and Olympia Snowe — to break ranks Wednesday and end the GOP filibuster of the state bailout bill.

The amount of benefit to Maine is unclear, so it’s hard to compare with previous vote-buying such as the “Louisiana Purchase” to win the vote of Sen. Mary Landrieu, D-La., or the “Cornhusker Kickback” to get a vote from Sen. Ben Nelson, D-Neb.

But the proclamations of “it’s paid for” amount to a typical Washington shell game.

Politico reported, “The biggest single cut is an $11.9 billion rollback of added food stamp benefits first approved as part of the giant recovery bill last year.” But that offset isn’t expected to happen. According to Huffington Post, “Democrats told HuffPost they will work to prevent the food stamp cuts from ever taking effect.”

Since the supposed food stamp cuts reportedly would not occur until 2014, Congress has plenty of time to reinstate the imaginary offsets.

Just like phony spending reductions were used to provide offsets in the Obamacare healthcare bill (thereby creating false claims of reducing the deficit), the same gimmick is being used to justify the $26 billion in new spending.

As Associated Press reported, “Most Republicans opposed the measure, calling it a payoff to public employee unions and warning that it would make the states ever-dependent on federal funds.”

The fact that spending — not savings — merits a priority rush job was not lost on Sen. Scott Brown, R-Mass., who said there were better options: “We can pay for that by not increasing taxes in the middle of a two year recession,” said Brown.

But once again, all thoughts of spending discipline are lost in Washington’s stampede to spend money.

Ernest Istook, former 14-year member of Congress, is a Distinguished Fellow at The Heritage Foundation. First appeared at

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