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Schumer To GOP Govs On Stimulus: Take It Or Leave It

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Sen. Charles Schumer (D-NY) has a message for Republican governors hemming and hawing over whether to accept the stimulus money Uncle Sam is mailing to each state: Take it or leave it.

Several GOP governors, including Louisiana's Bobby Jindal and South Carolina's Mark Sanford, have cited ideological differences with the stimulus spending and suggested they may take some parts of it and decline the rest. For Schumer, it's all or nothing.

"No one would dispute that these governors should be given the choice as to whether to accept the funds or not. But it should not be multiple choice," Schumer writes in a letter to Office of Management and Budget Director Peter Orszag.

Schumer argues that the stimulus plan is a comprehensive approach, and rejecting portions of the package of it would undermine it. "To protect the integrity of the recovery program, I urge the administration to issue implementation guidance clarifying that while any Governor may exercise his or her discretion to accept or reject the federal funds provided in the stimulus, no Governor should have the authority to arbitrarily adopt a select subset of the overall package," writes Schumer.

Schumer also argues that cherry picking the stimulus is unconstitutional. "To allow such picking and choosing would, in effect, empower the governors with a line-item veto authority that President Obama himself did not possess at the time he signed the legislation," he writes.

UPDATE: House Majority Whip James Clyburn (D-S.C.) authored the part of the stimulus that allows state legislatures to overrule governors on whether to accept stimulus money because he was concerned Stanford would turn down money in his home state.

Now, he's highlighting Jindal's willingness -- indeed, his eagerness -- to take federal money for Katrina recovery, while rejecting other forms of federal aid.

"It seems to me like Governor Jindal is bluffing," said Clyburn in a statement. "The incentives in the economic recovery package to help states cover more unemployed workers will not cause states to increase taxes. In fact, it would do the opposite--the American Recovery and Reinvestment Act provides a much-needed cash infusion for severely depleted state unemployment trust funds and helps states avoid triggering mandatory tax increases.

"In the wake of a natural disaster after Hurricane Katrina devastated the Gulf Coast in 2005, then-Congressman Jindal cosponsored and supported legislation to expand unemployment benefits and inject federal dollars into Louisiana's unemployment trust fund. Yet today in the face of a financial disaster and record unemployment, he opposes similar action under the American Recovery and Reinvestment Act. What changed?"

The full letter, as provided to the Huffington Post:

Dear Director Orszag:

In recent days, a small minority of governors, mostly Republicans, have publicly weighed the possibility of foregoing certain emergency provisions provided under the American Economic Recovery and Reinvestment Act signed last week by President Obama. I believe this prospect not only would undercut the stimulative effect of the recovery package, but also is inconsistent with a key provision included in the law passed by Congress. To protect the integrity of the recovery program, I urge the administration to issue implementation guidance clarifying that while any Governor may exercise his or her discretion to accept or reject the federal funds provided in the stimulus, no Governor should have the authority to arbitrarily adopt a select subset of the overall package.

As you know, Section 1607(a) of the economic recovery legislation provides that the Governor of each state must certify a request for stimulus funds before any money can flow. No language in this provision, however, permits the governor to selectively adopt some components of the bill while rejecting others. To allow such picking and choosing would, in effect, empower the governors with a line-item veto authority that President Obama himself did not possess at the time he signed the legislation. It would also undermine the overall success of the bill, as the components most singled out for criticism by these governors are among the most productive measures in terms of stimulating the economy.

For instance, at least two governors have proposed rejecting a program to expand unemployment insurance for laid-off workers. Economists consistently rank unemployment insurance among the most efficient and cost-effective fiscal stimulus measures; by one frequently cited estimate, it provides an economic return of as high as $1.73 for every dollar invested. Thus, by denying this provision for their residents, these governors are not just depriving some of the neediest Americans of relief in a dire economy; they are undermining the overall stimulative impact of the package.

No one would dispute that these governors should be given the choice as to whether to accept the funds or not. But it should not be multiple choice. The composition of the package was rightly dictated by economic considerations; we should not let the implementation of the package be dictated by political considerations.

Sincerely,

Charles E. Schumer

United States Senator