Swindling Us With the Stimulus

In February, President Barack Obama went on national prime-time television to sell his stimulus package to the American taxpayer, arguing that its quick passage would mean immediate economic relief.

Nearly five months later, the economy continues to sink while the jobless rate continues to rise. With only 11 percent of the "emergency" spending package going to things that would have an immediate impact on the economy (temporary tax cuts, infrastructure spending and assistance to the unemployed), it is really no wonder.

What is a wonder, however, is the all-too-typical way money is being spent.

For example, in Pennsylvania it appears that the $3.3 billion budget deficit will finally be plugged -- with money from the stimulus package. While it won't solve the Keystone State's woes by itself, the stimulus funding will fill the biggest part of the hole. Meanwhile, other states facing similar or even more intense budget crises are planning to use their newly awarded stimulus money to close their gaps, as well.

So far, only $100 billion of the $787 billion stimulus package has been spent so far, and most of it has gone to state governments, not taxpayers. States were supposed to funnel their end of the stimulus package into infrastructure and unemployment assistance. Instead, Pennsylvania Gov. Ed Rendell predicts between 600 and 800 state employees will be laid off.

The reason for the impasse in Pennsylvania was that Rendell wanted to expand the education budget despite an anticipated revenue shortfall next year. Rather than cutting costs to accommodate the expected decrease, his plan called for increasing the state's personal income tax to ensure his legacy (the governor's second term expires next year). Republicans staunchly oppose this idea, and made it clear they would not budge on their position. What's so egregious about this battle is that while state employees are being told to tighten their belts, state lawmakers are actually lining theirs.

This excellent article by Lancaster newspaper reporter Tom Murse details how state legislators are using the budget impasse to make a few extra bucks -- at the taxpayer's expense. I'm proud to say, however, that the Republican lawmakers who represent me -- State Rep. Katie True and State Sen. Lloyd Smucker -- both refused to take part in this obscene money grab.

Pennsylvania's budget woes -- and its anticipated solution -- are not unique and they underscore the fundamental problems with Obama's stimulus package: once the stimulus money is spent, there is virtually no way to track where it's going or who will benefit from it. Massive budget gaps exist in Hawaii, California, Idaho, Kentucky, Pennsylvania and Maine, and in each case, the states are considering tapping their stimulus money to solve their problems. Instead of helping these states improve their economic conditions, the stimulus is just barely keeping them from financial ruin (and in states like California, even that may not be enough). For states with closer gaps than others, the stimulus may actually be used to promulgate excessive spending into the future by providing a lifeline to funds that their own economies aren't generating.

Now it appears that a second stimulus package is being considered. While this may not be a direct response to the budgetary problems facing these states, there is little doubt that if they receive more stimulus money, they will simply add that money to their pots.

Before adopting another stimulus package, Congress should consider reallocating the remaining money from the original stimulus plan. Since it hasn't been spent yet, it's not too late prevent the stimulus from going to some of its more .

Now is the time for the remaining $687 billion to go where it's supposed to go -- helping the US economy.