The Huffington Post reported that six republican governors have considered turning down money from the federal stimulus package.

A handful of Republican governors are considering turning down some money from the federal stimulus package, a move opponents say puts conservative ideology ahead of the needs of constituents struggling with record foreclosures and soaring unemployment.

Though none has outright rejected the money available for education, health care and infrastructure, the governors of Texas, Mississippi, Louisiana, Alaska, South Carolina and Idaho have all questioned whether the $787 billion bill signed into law this week will even help the economy.

I am really dumbfounded that anyone would consider this an option and agree with Atlantic blogger, Ta-Nahisi Coates, that this is “politically stupid.”

How do you tell your citizens, yes the federal government was going to give us billions to repair our schools and create jobs, but I said no? Especially given the economic conditions of these states:

Unemployment Rates

• South Carolina - 9.5 percent (Ranked 49^th)
• Mississippi - 8.0 percent (Ranked 40^th)
• Alaska - 7.5 percent (Ranked 35^th)
• Idaho - 6.4 percent (Ranked 22^nd)
• Texas - 6.0 percent (Ranked 17^th)
• Louisiana - 5.9 percent (Ranked 16^th)

This is probably just a play for press coverage. But if they are seriously considering refusing the money, they should listen to constituents like Ruby who wrote the following comment to this post:

Governor Stanford,
Given the percentages of the unemployment rate in South Carolina and the number of families who will, if not already, lose their homes through unemployment, how will you help these people stay in their homes. Building one retail mall will not cut it. Maybe you and your supporters are feeling the pressure of a failing economy but believe there are more people who would benefit from the stimulus package than from your pride and possible other hangups. That old southern mentality needs to be put on the shelf. The good ole boys way of thinking will get the people of S.C. nowhere, unless of course you have a few billion dollars lying around to bail out the people in S.C.

Today, PPI released a new book, Memos to the New President. It is a compilation of the memo series we have been doing for the past four months. Readers of this blog may be particularly interested in Chapter 3: Restoring the Promise of Social Mobility , which includes issues ranging from expanding the Earned Income Tax Credit to reducing the number of high school drop outs.

Today the National Governors Association (NGA) and the National Conference of State Legislatures (NCSL) called on Congress and the next administration to assist states and localities through a new stimulus package.  According to NGA:

Twenty states already have cut $7.6 billion from their fiscal year (FY) 2009 budgets, and 30 states have identified additional shortfalls totaling more than $30 billion. Twenty-five states also have identified shortfalls of $60 billion for FY 2010. However, these numbers tell only a portion of the story, with previous budget actions and the continuing downturn producing cumulative budget gaps of more than $140 billion for FY 2009 and FY 2010. Additionally, states feel the greatest impact on their budgets in the year after a recession ends, primarily because Medicaid growth occurs late in the recession and employment growth lags the recovery. Thus, the repercussions of this downturn will last for several years-and will be much worse without swift action.

While most state leaders are pleased with President-elect Obama’s plan to boost the economy by “creating and saving 2.5 million jobs, jobs rebuilding our infrastructure, our roads, bridges, modernizing our schools and creating the clean energy infrastructure of the 21st century,” one governor said no thanks.

South Carolina Governor Mark Stanford has vocally opposed all federal bailouts, including those that would provide funds for his state. In a November op/ed in the Wall Street Journal, Stanford wrote:

I find myself in a lonely position. While many states and local governments are lining up for a bailout from Congress, I went to Washington recently to oppose such bailouts. I may be the only governor to do so.

What Stanford fails to mention is that his home state of South Carolina has the highest unemployment rate - 8 percent - in the Southeast and the fourth highest in the nation.

When the nation’s governors meet with president-elect Obama tomorrow, let’s hope the new leader will follow the needs of South Carolina residents instead of the wishes of its governor.

Many folks here in DC are still basking in the afterglow of Obama’s big victory. Now granted this is a city that went 93 percent for Obama, so the warm fuzzies probably aren’t as strong everywhere. However, even in the most conservative parts of our country, Obama’s campaign resonated with many people who had a longing for something more.

How does a President Obama keep this momentum going now that the campaign is over? It’s hard to imagine that he can move people to tears about tax policy or trade negotiations, but he has an unprecedented amount of energy behind him that could be tapped to bring change beyond one election.

The reality is that an Obama administration can’t fulfill all of his campaign promises. President elect Obama began tempering expectations during his speech on Tuesday night:

The road ahead will be long. Our climb will be steep. We may not get there in one year or even in one term. But, America, I have never been more hopeful than I am tonight that we will get there.

He will inherit an unthinkable slate of problems: the biggest deficit in history, two wars, energy crisis, and a financial meltdown, just to name a few. With this tight financial squeeze, there is only so much the federal government can do to help struggling families. We can’t expect new programs, or even full funding for existing social service programs.

But Obama has an asset that few — if any — elected officials have ever had: an energized group of supporters who are more connected and better organized than ever before. The next administration would be wise to keep us energized and ask us to sacrifice as much for our communities as we did for his campaign. We as a country may never agree on marginal tax rates or when life begins, however, we all can agree that we need to help our neighbors and better our communities. The federal government can’t solve all of our problems, but we as a collective body can. President elect Obama, please call us to do more.

I can’t think of anything more fitting for the “What Works Wednesday” series on this day after the election. Yesterday, 136.6 million people came together in one common act: to peacefully cast their ballots for the next president of the United States. More than 64 percent of registered voters participated - the highest turnout rate since 1908. Washington Post columnist E.J. Dionne said it best:

Above all, it is time to celebrate the country’s wholehearted embrace of democracy, reflected in the intense engagement of Americans in this campaign and the outpouring to the polls all over the nation. For years, we have spoken of bringing free elections to the rest of the world even as we cynically mocked our own ways of conducting politics. Yesterday, we chose to practice what we have been preaching.

There were numerous reasons why people voted yesterday and we didn’t all pick the same candidate. Many people woke up this morning excited, some disappointed, but we all agree on what happens next: in January President George W. Bush will hand over power to the new President Barack Obama. There will still be some wounds that need to be healed, but the transfer of power will happen peacefully and gracefully.

Last night John McCain urged his supporters to:

join me in not just congratulating him, but offering our next president our good will and earnest effort to find ways to come together to find the necessary compromises to bridge our differences and help restore our prosperity, defend our security in a dangerous world, and leave our children and grandchildren a stronger, better country than we inherited.

Whatever our differences, we are fellow Americans. And please believe me when I say no association has ever meant more to me than that.

And Barack Obama reached out to those who didn’t support him:

And to those Americans whose support I have yet to earn, I may not have won your vote tonight, but I hear your voices. I need your help. And I will be your president, too.

Now we as a nation collectively move forward. Let’s get to work.

Today marks the end of the “epic campaign” that we have watched with anticipation for nearly two years.

Because this blog focuses on social mobility issues, I am going to go with the assumption that you are reading it because you care about creating opportunities for all Americans. As you head to the polls today, keep these issues in mind as you make your final decision.

Who will enact policies that promote strong families and safe neighborhoods? Who is best positioned to create opportunities for work and social mobility while also calling for personal responsibility?  Which ticket will work to make sure all our children have access to quality education and health care?

Today we vote.

Tomorrow we get back to the business of policy and governing.

Let’s hope the nation and world pays as much attention to the policy making as they have to the outcome of today’s election.

Too often we take the successes of social security for granted, when in fact, it has been one of the most successful anti-poverty programs. The Center on Budget and Policy Priorities found that “Social Security benefits lift nearly 13 million seniors age 65 and older above the poverty line.” Furthermore, if we take away social security income, nearly one of every two elderly people would live below the poverty line.

However, our current social insurance programs will not be able to last in their current forms as baby boomers enter retirement in mass quantities. In PPI’s memo’s to the next president series, Bob Pozen, chairman of MFS Investment Management, argues that the next administration should make Social Security reform a priority. Pozen writes:

But why start with Social Security? Doesn’t Medicare present a much bigger financial challenge? It does, and that is exactly the point. Since Social Security is, comparatively speaking, the “easy” fix, it ought to be repaired first. We know how to fix Social Security, whereas there is less agreement on viable options for reining in health care costs. If we can build a sturdy coalition to reform Social Security, that might make it easier to form a similar bipartisan alliance when we tackle Medicare down the line.

 In his memo, Pozen outlines a series of do’s and don’ts for the next administration:

1. Do protect Social Security’s character as a social-insurance program whereby every contributing worker receives retirement benefits related to his or her contributions.
2. Do make Social Security more progressive for low-wage workers.
3. Don’t divert any payroll taxes from Social Security to private “carve out” accounts invested in the securities markets.
4. Don’t reduce benefits for anyone now in retirement or close to retirement.

 More details of  Pozen’s plan can be found here.

Even if you didn’t watch last night’s debate, chances are you have heard of Joe the Plumber. This man went from “average Joe” to national fame because of this exchange with Senator Obama. Even though Joe the Plumber — who goes by Plumber because his real last name is Wurzelbacher — believes Obama’s tax plan verges on socialism, he had to be impressed with the amount of time, thoughtfulness and honesty the Democratic nominee gave him on the rope line.  Most politicians would have either ignored a person who so obviously disagreed with him or they would have lost their cool arguing with them.  Obama did neither.

More importantly though, Joe is wrong. Obama’s plan is not socialism, but instead a much needed progressive tax reform to support an effective capitalist economy. It is not a redistribution of wealth, but a change to the tax code to ensure that working families have the opportunity to get ahead just like Joe has.  Obama’s plan would offer tax breaks to 95 percent of Americans. The only people who would see an increase in taxes are those making more than $250,000 a year. And their taxes wouldn’t rise any higher than the levels during the Clinton Administration - a time when both Joe the Plumber and Joe the Stockbroker were both doing well.

The fact is that during the past eight years, the Bush tax policies - which Sen. McCain wants to continue - have favored those that have already made it and held back those trying to pull themselves into the middle class and beyond.

As has been widely reported, the income gap in our country is expanding by the second, and our current tax policies exacerbate this gap.  While we are likely in a recession right now, we also need to remember that during the Bush “expansion” years we saw the rich get richer while the poor got poorer.  Unlike in the 1990’s, our economy did not lift all boats.  This recent article from Kiplinger’s Personal Finance Magazine states:

New statistics from the Internal Revenue Service show that the highest-earning 1% of taxpayers in America make 22.06% of all income reported to the government. That’s almost twice the 12.51% of total income earned collectively by the lowest-earning 50% of workers. Yes, 1.4 million taxpayers claim 22% of income earned while 68 million share just 12.5%.

In fact, if you make more than $32,000 a year, you earn more than half of all Americans.

Politically, taxes are a very sensitive issue.  As Obama has said on many occasions, no one wants to pay higher taxes.  But Obama’s tax reforms are not socialism.  They will create a tax structure that will support an economy that lifts all boats.  Joe, you have worked hard and have seen the rewards for your success.  Obama’s tax reforms are meant to ensure that those hard working families that are still at the bottom of the ladder have the same opportunity you did to achieve the American Dream.

Yesterday in Ohio, Sen. Barack Obama announced a $60 billion economic assistance package. His plan, which places a high priority on job creation, includes:

• A $3,000 tax credit to employers for each new full-time employee they hire - this particular proposal is the most costly and is estimated to use $40 billion of the $60 billion allotment of federal funds;

• A 90-day foreclosure moratorium;

• An option to allow struggling families to withdraw up to 15 percent of their savings, or up to $10,000 from their 401(k) or IRA penalty free;

• A new federal mechanism that lends money to struggling states and cities; and

• A temporary suspension of taxes on unemployment insurance benefits.

Obama’s $60 plan would work in coordination with his earlier stimulus proposal that includes $50 billion to help states with infrastructure projects and $65 billion in a second round of taxpayer rebates.

In his speech, the Democratic presidential nominee left open the option of encouraging Congress to come back into session after Nov. 4 to work on this economic recovery plan:

We can’t wait to help workers and families and communities who are struggling right now — who don’t know if their job or their retirement will be there tomorrow, who don’t know if next week’s paycheck will cover this month’s bills.

John McCain is scheduled to announce his economic stimulus plan today.

On Monday I noted that unemployment has put a strain on state piggy banks leaving them in crisis. Today, Time published a startling article about how the credit crunch is causing budget crunches for states and localities that are having difficulty paying for basic public services like education, fire departments and public works. Many states sell bonds and other short term notes to pay for these services and projects, but as the article notes:

Since the Sept. 15 collapse of Lehman Brothers, the $2.6 trillion market for state and city bonds has been virtually frozen - partly because investors are scared to own anything more dangerous than Treasuries, and partly because interest rates cities must pay to lure buyers have shot up by 25% or more. As a result, some $15 billion worth of projects have been temporarily shelved in the past three weeks, according to the consultancy Municipal Market Advisors.

DLC and PPI Friend Jonathan Miller, who is currently Kentucky’s secretary for finance and administration, is quoted in the article saying “[w]e were really worried.  We had encountered a lot of pessimism and skepticism that we’d be able to sell these bonds.”  Fortunately, Miller was finally successful in selling $400 million in bonds this week, one of the first major issues of bonds since the federal government had to step into the credit markets.

But, even if the credit freeze is slowly thawing, this article points out two critical consequences of this crisis for states and localities.  First, the premium paid by states for selling these bonds is much higher than it was before the crisis.  And second, the article notes that “the credit crisis has tumbled into the real economy” and will lead to significantly lower revenues from property, sales and income taxes.  As a result, many states and cities are already announcing budget shortfalls:

Arizona is projecting a billion-dollar budget shortfall, as is California. New Jersey is falling $1.7 billion short, while New York is $1.2 billion behind. Among the cities that have already announced spending and job cuts are Indianapolis, Tempe, Ariz., Columbus, Ohio, and New York City.

It is becoming more evident every day that state and local governments are going to be facing tough budget situations for at least a few years.  When their funds go dry, we all suffer, but low-income Americans take the hardest hit because they lack the resources for other options. State and local services serve as a great equalizer for Americans, ensuring that among other things we are safe and our children are educated. Moving forward, we must guarantee that working families aren’t left behind