As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Wednesday, February 11, 2009

Raw Numbers On The California Cuts

When the cuts to the federal economic recovery bill in the Senate were made public, my back-of-the-envelope calculation was that $5-$8 billion dollars in aid to California would be lost. The San Jose Mercury News did the math and came up with similar numbers.

The $838 billion Senate bill would create about 400,000 jobs in the state by funding infrastructure projects, from schools to roads to broadband. But that's 51,000 to 63,000 fewer jobs for the state than the $820 billion House bill, according to the Center for American Progress. The Senate plan puts a heavier emphasis than the House bill on stimulating the economy through tax cuts, in addition to direct government spending.

Funds for reimbursing state Medicaid costs are about the same in each bill, but the funding formula in the House bill favors states with higher unemployment. California would receive $11 billion in the House bill and $9.6 billion in the Senate measure. The House bill also has funds to help those who are recently unemployed receive health coverage. "On health, the House bill is significantly better for California," said Anthony Wright, executive director of Health Access California, a consumer advocacy group.

The Senate cut in half the House's $79 billion fund to help states pay for education and other services. If the Senate version prevails, California would receive about $4 billion instead of the $7.9 billion in the House bill. In addition, the Senate eliminated $14 billion in funds the House allocated to modernize schools, which drew sharp criticism from Rep. George Miller, a Concord Democrat who chairs the Education and Labor Committee. He said the Senate version would cost 315,000 construction and other jobs nationwide.

"With more Americans losing their jobs by the day, we must make every effort to bring that figure up," Miller said.

The Chronicle has a similar article.

The latest from the negotiating table is that only $5 billion of the $40 billion cut from the Fiscal Stabilization Fund will be restored in conference. So that's about $3 billion less, overall, for California from that fund, as well as the cuts to Medicare funding of about $2 billion. The school repair funding will be restored to about $6 billion from $16 billion, which means that California probably loses $1 billion there.

So overall, we're probably $5-$6 billion short from where we were with the House bill. Which will make it that much more difficult to cut a budget deal. In addition, if the formula for getting federal funds is in the form of block grants with a state match, California won't be able to access any of them until the cash crunch is solved.

...overall, the package will likely be trimmed back to $790 billion, which makes sense to approximately no one. It looks like a lot of that is coming from tax cuts, though. And of course, it's a small price to pay to keep a smile on Joe Lieberman's face.

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