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Advocacy Executive Director's Reports It's time to stimulate the economy
When Congress passed the Wall Street rescue plan, the measure was hailed as a major step that would stabilize our nation’s economy. The $700 billion package, however, was an emergency bill intended to prevent an economic catastrophe, but it wasn’t designed to be a stimulus plan to boost our economy and shorten the recession. In the months that have passed, the economy has continued to sag and slump, we have seen further stock market erosion and dramatic increases in unemployment, and the expected credit thaw has not materialized.
Massachusetts is being hit hard by the economic downturn. After many months of relatively good news, the end of the summer brought bad news that keeps getting worse. Our economy is shedding jobs, consumer spending is down, businesses are folding, investment is drying up, tax revenues are declining, and budget deficits have spiked for government at all levels. Fiscal 2009 is a very difficult year, and fiscal 2010 is shaping up to be worse.
In his first press conference after the election, President-elect Barack Obama said the current Congress needs to pass a broad and aggressive economic stimulus plan, and if one is not enacted before he is inaugurated, it would be his first priority come January.
Washington should not wait until next year to pass a national economic stimulus package. The plan should pass this month, and that plan must include direct assistance to cities and towns.
Unfortunately, the lame-duck House and Senate may not be able to get the job done in time, which means communities could be forced to wait until February to know the extent of any federal assistance that will materialize.
As you may recall, the first economic stimulus package came in the form of a $600 check to most taxpayers in early 2008. That boosted consumer spending a little, but created only a temporary wave of support to flagging retail sales. A real stimulus measure would invest billions of dollars in our economy, targeting the funds in smart ways to support job creation in cities and towns throughout the nation.
The MMA, working through the National League of Cities, is calling for several specific provisions as essential components of any meaningful federal stimulus bill.
First, billions of dollars should be invested directly to cities and towns to fund ready-to-go infrastructure projects that are stalled because of a lack of funding. Eligible projects would include any currently unfunded projects that could be bid in 90 to 120 days that address new construction needs or critical improvements to roads, bridges and environmental infrastructure. This investment would create thousands of construction jobs, support essential public works initiatives that are vital to our future economic growth and prosperity, and provide meaningful benefits to communities and taxpayers. These funds should go directly to cities and towns, not be parked in state agencies, as this would cause harmful delays and add unnecessary bureaucratic entanglements.
Second, the measure should include provisions that require the U.S. Treasury and the Federal Reserve to use the tools they received in the Wall Street rescue legislation to provide local and state governments with access to short-term credit and long-term capital markets. The credit squeeze continues to drive up interest rates and the cost of borrowing, forcing localities to absorb higher costs or delay initiatives because of serious cash flow problems. The federal authorities must step in to assist cities and towns, otherwise Wall Street’s mistakes will cause even more damage to our local economy.
Third, almost every state in the country is facing a fiscal crisis, and federal assistance is vitally important to help close the states’ budget deficits. Cities and towns recognize that it is imperative that state governments receive support and relief as well, as we have a common stake in each other’s stability and strength. That is why the MMA and NLC support a special appropriation to reimburse states for a higher portion of Medicaid costs, as well as measures to extend food stamp and unemployment benefits. These measures will provide states with critical resources to balance their budgets and meet the higher costs that come during an economic downturn.
Congress had hoped to pass a comprehensive economic stimulus plan in mid-November, but was sidetracked by the implosion of the Big Three U.S. automakers and was forced to divert time and attention to that crisis. However, time is the most precious resource we have, and Capitol Hill must act as soon as possible.
The good news is that Massachusetts has an extraordinarily effective and powerful Congressional delegation that is pressing for immediate action. It is important that we all share these priorities with our U.S. representatives and senators and ask for their support. The time to call them is today.
Advocacy Executive Director's Reports It's time to stimulate the economy
It's time to stimulate the economy
When Congress passed the Wall Street rescue plan, the measure was hailed as a major step that would stabilize our nation’s economy. The $700 billion package, however, was an emergency bill intended to prevent an economic catastrophe, but it wasn’t designed to be a stimulus plan to boost our economy and shorten the recession. In the months that have passed, the economy has continued to sag and slump, we have seen further stock market erosion and dramatic increases in unemployment, and the expected credit thaw has not materialized.
Massachusetts is being hit hard by the economic downturn. After many months of relatively good news, the end of the summer brought bad news that keeps getting worse. Our economy is shedding jobs, consumer spending is down, businesses are folding, investment is drying up, tax revenues are declining, and budget deficits have spiked for government at all levels. Fiscal 2009 is a very difficult year, and fiscal 2010 is shaping up to be worse.
In his first press conference after the election, President-elect Barack Obama said the current Congress needs to pass a broad and aggressive economic stimulus plan, and if one is not enacted before he is inaugurated, it would be his first priority come January.
Washington should not wait until next year to pass a national economic stimulus package. The plan should pass this month, and that plan must include direct assistance to cities and towns.
Unfortunately, the lame-duck House and Senate may not be able to get the job done in time, which means communities could be forced to wait until February to know the extent of any federal assistance that will materialize.
As you may recall, the first economic stimulus package came in the form of a $600 check to most taxpayers in early 2008. That boosted consumer spending a little, but created only a temporary wave of support to flagging retail sales. A real stimulus measure would invest billions of dollars in our economy, targeting the funds in smart ways to support job creation in cities and towns throughout the nation.
The MMA, working through the National League of Cities, is calling for several specific provisions as essential components of any meaningful federal stimulus bill.
First, billions of dollars should be invested directly to cities and towns to fund ready-to-go infrastructure projects that are stalled because of a lack of funding. Eligible projects would include any currently unfunded projects that could be bid in 90 to 120 days that address new construction needs or critical improvements to roads, bridges and environmental infrastructure. This investment would create thousands of construction jobs, support essential public works initiatives that are vital to our future economic growth and prosperity, and provide meaningful benefits to communities and taxpayers. These funds should go directly to cities and towns, not be parked in state agencies, as this would cause harmful delays and add unnecessary bureaucratic entanglements.
Second, the measure should include provisions that require the U.S. Treasury and the Federal Reserve to use the tools they received in the Wall Street rescue legislation to provide local and state governments with access to short-term credit and long-term capital markets. The credit squeeze continues to drive up interest rates and the cost of borrowing, forcing localities to absorb higher costs or delay initiatives because of serious cash flow problems. The federal authorities must step in to assist cities and towns, otherwise Wall Street’s mistakes will cause even more damage to our local economy.
Third, almost every state in the country is facing a fiscal crisis, and federal assistance is vitally important to help close the states’ budget deficits. Cities and towns recognize that it is imperative that state governments receive support and relief as well, as we have a common stake in each other’s stability and strength. That is why the MMA and NLC support a special appropriation to reimburse states for a higher portion of Medicaid costs, as well as measures to extend food stamp and unemployment benefits. These measures will provide states with critical resources to balance their budgets and meet the higher costs that come during an economic downturn.
Congress had hoped to pass a comprehensive economic stimulus plan in mid-November, but was sidetracked by the implosion of the Big Three U.S. automakers and was forced to divert time and attention to that crisis. However, time is the most precious resource we have, and Capitol Hill must act as soon as possible.
The good news is that Massachusetts has an extraordinarily effective and powerful Congressional delegation that is pressing for immediate action. It is important that we all share these priorities with our U.S. representatives and senators and ask for their support. The time to call them is today.
Written by MMA Executive Director Geoff Beckwith
