With the passage of financial rescue legislation today, Congress took an important step to pull us away from the brink of disaster. The final bill is not the blank check the Bush administration demanded two weeks ago. Rather than protecting Wall Street profits, it now protects the taxpayers and adds some needed oversight. Congress also included significant provisions AFSCME has fought for: restrictions on the immoral and excessive pay of corporate CEOs, and important new help for families facing foreclosures on their homes.
Unfortunately, strengthening credit markets and adding a few reforms is simply not enough to get our economy back on track. While we may have averted a disaster today, we still face a challenge unequaled since the Great Depression. More than 750,000 people have lost their jobs since the beginning of the year -- 160,000 last month alone, the most in more than 5 years. Millions of Americans are now out of work at a time when jobs just aren't available and their unemployment insurance is running out.
At times such as this, their families rely on state and local governments to provide a cushion for the blows of unemployment. Yet state and local governments are facing their own crisis, forcing many to make painful cuts in health care, education, public safety and other vital services. Today's Los Angeles Times reports that California "is close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans that it typically relies on to remain solvent."
According to the Times, Governor Arnold Schwarzenegger is so alarmed by the national financial crisis that he has written to Treasury Secretary Henry M. Paulson to notify him that California might need "an emergency loan of as much as $7 billion from the federal government within weeks."
Other states are feeling the pain as well. Stateline.org reports that "New York, along with New Jersey and Connecticut, will be hard hit by the layoffs of thousands of financial industry employees -- by some estimates, the financial sector accounts for as much as one-fifth of their revenues. The tidal wave of bad news comes on the heels of an already brutal budget year that forced states to dip into rainy day funds, implement hiring freezes and put off projects to collectively plug deficits of more than $40 billion in their fiscal 2009 budgets -- triple the $13 billion shortfall they weathered the previous year."
More than 7,000 full-time state employees nationwide have been laid off already in the economic downturn, and state officials have announced layoffs for more than 26,000 other employees. Thousands more have been asked to take early retirement.
Majorities in both the House and Senate supported legislation to help the states meet citizens' needs. The House passed a measure to assist states during this crisis, but Republican senators have blocked the bill's progress. These same Republicans are more than willing to give Wall Street help, but not our states, cities and working families.
As a result, millions of additional American families may see this economic crisis turn into a catastrophe, as their jobs, homes and hopes are lost. The reckless Senate Republicans who stood in the way of fiscal relief for the states will bear the responsibility for blocking desperately needed help. Working families won't soon forget these disgraceful votes. Nor will they forget on Election Day.