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Would Stimulus Injection Offset NY Budget Cuts?

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Friday, October 31, 2008   

New York, NY — "You helped Wall Street - now, how about the states?" That's essentially the message Governor David Paterson has delivered to Congress this week. He he testified before the powerful U.S. House Ways and Means Committee, recommending a stimulus package to help states meet their budget shortfalls.

Gwen O'Shea, president and CEO of the Health and Welfare Council of Long Island, agrees with Paterson. She believes New York has made all the budget cuts it can, including limiting many of the social programs that provide a safety net for families. She sees potential for a plan that would target states' infrastructure and health care needs, and would expand programs like the federal Supplemental Nutrition Assistance Program, more commonly known as Food Stamps.

"People don't save Food Stamps - they use them. About 90 percent of Food Stamp recipients use the money the same month they receive it. So, if we increase those allotments, we address the issue of hunger, and also stimulate the local economy."

O'Shea points out that, for every dollar invested, Food Stamp use returns $1.73 to the economy. Paterson testified that there are also plenty of infrastructure programs waiting to begin, all of which could help boost the state's lagging economy. What they lack, he says, is federal funding.

"We would have 40 shovel-ready programs for improving highways and bridges. We would have another 58 programs ready to go in the area of water projects."

Paterson has suggested that the stimulus plan include an increase of at least 5 percent in the Federal Medical Assistance Program; and that new federal block grants be issued, much like the ones Congress enacted to help the economy after the attacks of September 11. Not all governors agree with his proposals, however - some say an additional major expenditure would drive the nation deeper into debt.




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