UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

January 29, 2009

EMENDATIONS

Covert revenue sharing

We criticized the bailout for lacking revenue sharing with states and cities, failing to realize that it was there, but hidden. As one account put it: "The largest proposed outlays amount to just writing unrestricted checks to state governments. Nearly $100 billion would result from increasing the 'Medicaid matching rate,' a technique for reducing states' Medicaid costs to free up state money for spending on anything governors and state legislators want. An additional $80 billion would be given out for 'state fiscal relief.'"

Gary Emerling of the Washington Times was grumpy about it:

=== D.C. officials say any federal stimulus funds provided for schools and bridges in the District will enable them to drop their own funding plans for such projects and divert the money to help plug other gaps in their 2010 budget. . .

Some economists see the plan as an example of a "bait-and-switch" tactic likely to be duplicated in cities and states across the country, effectively redirecting much of the $819 billion package to purposes for which it was not intended. . .

The District has identified food stamps and unemployment services among its top priorities for any new money, while Virginia hopes to free up money for things like Medicaid and transportation. Maryland Gov. Martin O'Malley also has said Medicaid spending is an area that could be bolstered by stimulus money." ===

Of course, there was a time when a conservative paper like the Times would have applauded the idea of states and localities making such decisions rather than the federal government.

Municipal cruelty

We mistakenly ran the story about the 93 year old man who froze to death after the power company cut off his electricity under the heading "Corporados." It was municipal and not a private power company.

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