Deficit Hysterics To State Governments: Fire Workers, Cut Schools, Drop Dead

Bill Scher

Stateline just published a horrifying report on how the recession has depleted government coffers and forced states to execute mass layoffs and deep cuts in services. And the Wall Street Journal today reports that the recession continues to put the hurt on states: a collective budget gap of $127 billion is expected during the next two fiscal years.

What is the response to the suffering states from the deficit hysterics in the U.S. Senate? Suffer more.

The latest proposal to break the current impasse over another jobs and unemployment assistance bill is to phase out over the next six months the emergency Medicaid funding the federal government has been providing to shore up state budgets.

This is madness. We’ve already lost jobs because we didn’t give the states enough help. How do the deficit hystercs think giving less help is going to work?

Economist Mark Zandi said states need another $24 billion in Medicaid help this year, or else we could lose another 200,000 jobs on top of the 230,000 state and local government jobs lost since 2008. With the fiscal picture not getting any brighter over the next two years, Zandi fears a “The pain has reached nearly every corner of government, including higher education, corrections, K-12 education and Medicaid reimbursement rates to providers.”

This is about lost jobs, weaker schools, poorer health and less safe streets. That is something to get hysterical about.

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