Alexander on State Bailout: Washington Doesn’t Have “Money Lying Around” for President’s Request of $50 Billion for States

Says “$23 Billion to Save 100,000 Teacher Jobs Works Out to $230,000 Per Teacher”

Posted on June 16, 2010

WASHINGTON – U.S. Senator Lamar Alexander (R-Tenn.) today made the following remarks on the floor of the U.S. Senate: 

  • "This past weekend the president sent a letter to Congress urging us to approve $50 billion in emergency aid to state and local governments . . . the two points I want to make are: One, Washington created this financial cliff over which the states are about to run.  And two, when it comes to the question of teachers and $23 billion for teachers, I think we need to ask the questions: ‘Where is the money going to go?  And from whose schoolchildren are we going to borrow it?’  We don’t have extra money lying around Washington, D.C., right now—we have a great big problem with spending and debt.”
  •  
  • “Now, on teacher salaries, the first question is: ‘Where’s the money going to go?’  The request says this will save 100,000, maybe 300,000, teacher jobs.  We’re supposed to appropriate $23 billion for that purpose.  Well, at 100,000 jobs, that works out to about $230,000 per teacher job saved.  If we’re saving 300,000 teacher jobs with that $23 billion, that works out to $76,000 per teacher job saved.  The average national teacher’s salary is $46,000. Where does the rest of the money go?”
  •  
  • “In Tennessee, we were very fortunate that our state was one of two winners in the Race to the Top—give that credit to our governor and the teachers in the state.  Tennessee will get $500 million as a result of it.  Yet the health care bill, according to our governor, will take away more than twice that much during the same period of time by imposing on the state $1.1 billion in new Medicaid costs between 2014 and 2019.  So, Washington is really causing the state problems.”
  •  
  • “In his op-ed in the Wall Street Journal, the Democratic lieutenant governor of New York, Richard Ravitch, talked about the evaporation of stimulus funds which comes at the end of this year, and he said that Washington made it harder for states to pay their bills.  ‘In major budget areas like transportation, education and health care, stimulus funds came with strings attached that prevent states from substituting federal money for state funds, require states to spend minimum amounts of their own funds, and prevent states from tightening eligibility standards for benefits,’ Ravitch says. ‘The federal stimulus has led states to increase overall spending in these core areas, which, in effect, has only raised the height of the cliff from which state spending will fall if stimulus funds evaporate.’” 
  •  
  • “At the time the stimulus package was passed, everyone said that it was one-time funding.  All of us knew that Medicaid costs were overwhelming states, and still the majority in Congress went ahead and increased the federal match for Medicaid, required states not to change eligibility requirements and created this financial cliff at the end of the year which will cause the states’ share for Medicaid spending to increase from an average of 34 percent to 43 percent—a net increase of $39 billion in costs for 2011.  We’re getting close to the $50 billion in costs that Congress is being asked to bail states out for.”
  •  
  • “At the beginning of this Administration, there was a huge increase in education funding – $97 billion over two years. We were assured that this was one-time funding. The Department of Education said to the states in April of 2009, ‘the funds are expected to be a onetime infusion of substantial new resources. These funds should be invested in ways that don’t result in unsustainable continuing commitments after the funding expires.’ What we could have said was, ‘We don’t have any more money either, states. We just print it up here. So don’t expect us to send you any more.
  •  
  • “Our governor got the message. He said in his State of the State address in 2009, ‘Please let me make it clear that no proposed version of the stimulus is any panacea or silver bullet; substantial cuts are still needed under any circumstances. Furthermore, it is vital to remember that this stimulus money is one-time funds.’” 
  •  
  • “When we think about funding, we need to remember that the best thing for us to do is to stop imposing health care mandates on states that make it impossible for them to pay their bills and properly support higher education – which is going to take a terrible blow, because the passage of the health care bill means tuitions are going to rise.”

 

# # #