Governor Mayor Speak Out Against Job-Killing Budget Cuts

Isaiah J. Poole

Maryland Gov. Martin O’Malley and Philadelphia Mayor Michael Nutter are having some success in creating jobs for their residents in a tough economic climate. And Republicans in Congress are working to take away the tools they are using to put people to work.

Both elected officials were at a Democratic Steering and Policy Committee hearing on Wednesday to answer the question of what the federal government could do now to create jobs. (C-Span has video of the hearing.) One answer is clear: Stop the right-wing assault on federal programs governors and mayors are using to jump-start economic recoveries in their regions.

One example is the Build America Bonds program, which congressional Democrats are trying to resurrect after it expired at the end of December, sacrificed to make room for the two-year extension of Bush tax cuts for people making more than $250,000 a year. Build America Bonds were federally subsidized instruments states and municipalities could use to underwrite various public projects.

O’Malley told the committee that Maryland raised $470 million in Build America Bonds for projects around the state, and the ability to sell the bonds meant that the state saved $20 million that it could use for other purposes.
The proceeds from the bonds, plus other funds from the Recovery Act, enabled the state to begin a port refurbishing project in Baltimore that employs 2,800 people, repair roads and bridges around the state, and start light rail projects in Baltimore and the Washington suburbs, O’Malley said.

Maryland is facing a tough struggle cut state spending to balance its books, but O’Malley said that even in the midst of tightening budgets the state has made “the biggest investments in public education” in over a decade, including freezing tuition at state colleges for four years. “Why did we did that? Because we want our children to be winners in the new economy,” he said.

The nations and states that win the economic competition in the months and years ahead, O’Malley said, will be those that “demonstrate the ability to balance something more than their budget.”

Nutter told the committee that in the past two years he has used Energy Efficiency Block Grants and weatherization funds to repair homes and to put people to work on such projects as making a downtown hotel more than 25 percent more energy-efficient. Through the Neighborhood Stabilization Fund, the city has taken possession of dozens of foreclosed homes and put people to work fixing them up for resale. Community Development Block Grants have been used for affordable housing and other redevelopment projects in struggling neighborhoods, and one building project funded through the Recovery Zone Bond Program now houses businesses that together employ 300 people.

Nutter said that the Community Development Block Grant program is a particularly valuable job-creation tool. “These are some of the most flexible dollars available anywhere, and they have the most direct impact on the ground,” he said. He added that every $1 million in community development funds money produces between 50 and 200 construction jobs and an average 10 new permanent full-time jobs.

Yet Community Development Block Grant funds and some of the other federal programs Nutter has used to fuel the economic recovery in Philadelphia—much of which has been used for projects with clear national impact, such as work on Philadelphia’s port—are on the hit list of Republican leaders in Congress. Their stated plan to cut as much as $100 billion from the small slice of the federal budget left over after military, homeland security, health care aid and interest costs will by design leave little, if anything, in the way of state and local aid for revitalization efforts.

Nutter warned that such cuts don’t just hurt big cities, but they will lead to America falling behind even further in the global economic competition. We cannot compete with China and other global economic powerhouses “if our water pipes are bursting, our ports are not state of the art” and transportation networks are in disrepair. “We, unfortunately, are falling behind,” Nutter said.

At the beginning of the hearing, Democratic Leader Nancy Pelosi, D-Calif., echoed President Obama’s theme of “winning the future” through federal investment in education, innovation and infrastructure. “Democrats will measure every effort that comes before us by three standards: does it create jobs, reduce the deficit, and strengthen the middle class,” she said.

“Thus far, Congress has showed little urgency to address the jobs situation. That must change,” said Rep. George Miller, D-Calif., the committee’s co-chairman.

Key to addressing the nation’s job crisis, both O’Malley and Nutter agreed, is the federal government investing in the fundamentals of economic growth, acting as a partner with state and local governments, and with the private sector.

“There are may clever ways to improve government, but there is no clever way to build a $60 million bridge with $10 million.” O’Malley said. “I wish we could eat cake and lose weight, but that’s not possible. If this country is important enough to defend abroad, she should be important enough to invest in here at home.”


The Campaign for America’s Future is sponsoring a Summit on Jobs and America’s Future on March 10 in Washington. To sign up for the summit, which is free, click here.

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