State needs to use federal stimulus cash cautiously

Stimulus money has to be used to plug holes in an emergency, not to grow government.


Has President Obama's economic stimulus plan really created or saved 600,000 jobs, 45,000 of them in Washington state?

Perhaps. But it's nearly impossible to pinpoint the exact number of jobs spared because the federal government poured $787 billion into the U.S. economy.

After all, it's difficult to predict what would have happened if the federal government had not agreed to fund infrastructure projects and plug holes in state budgets. In addition, not all of the $787 billion has been spent. A huge sum of cash is still snaking its way through the pipeline.

What is clear is that the added cash has kept Washington and other states afloat when the recession put a kink in tax collections. For example, the money gave Gov. Chris Gregoire and state lawmakers some breathing room last year as they faced a $9 billion budget shortfall (the difference between the requests for funding and the tax dollars collected to pay for those requests).

Gregoire said this week that about $2 billion in stimulus funds have been spent. The state is expected to receive a total of $8 billion.

This week Gregoire said the White House is pushing for Washington state to get an additional $435 million to supplement Medicaid spending through the president's budget.

This cash will be a help for Gregoire and legislative leaders as they work to close the $2.6 billion gap between spending and revenue in the current budget.

This stimulus money isn't a panacea. In fact, it can actually add to the state's fiscal woes if the cash fuels programs that can't be sustained when the stimulus money runs out -- and it will run out.

Still, it is important to keep people working in state government and the private sector to get the economy moving forward again.

The "federal government really does understand that if the states continue to lay off or get in a position of raising taxes we will undermine the economic recovery of the country," Gregoire said.

Lawmakers must be careful to plug holes with stimulus money only if the program is essential and is likely to be funded next year and the year after with money other than the stimulus cash.

Stimulus money simply can't be used to grow the size of state government. Obama and Congress have already put nearly $1 trillion on the nation's credit card to deal with the economic crisis. The government isn't likely to -- and shouldn't -- offer up another stimulus package of this magnitude.


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