Losing your job is bad enough, right? Well, the AP has reported that as states partner with banks to dispense unemployment benefits, many recipients find themselves paying a fee to get their cash:

Thirty states have struck such deals with banks that include Citigroup Inc., Bank of America Corp., JP Morgan Chase and US Bancorp, an Associated Press review of the agreements found. All the programs carry fees, and in several states the unemployed have no choice but to use the debit cards. Some banks even charge overdraft fees of up to $20 - even though they could decline charges for more than what’s on the card.

While cards may provide extra convenience and lower administrative costs, they come at the expense of the unemployed and create a potential boon for banks.

In Missouri, for instance, 94,883 people claimed unemployment benefits through debit cards from Central Bank. Analysts say a recipient uses a card an average of six to 10 times a month. If each cardholder makes three withdrawals at an out-of-network ATM, at a fee of $1.75, the bank would collect nearly $500,000. If half of the cardholders also dial customer service three times in any given week (the first time is free; after that, it’s 25 cents a call), the bank’s revenue would jump to more than $521,000. That would yield $6.3 million a year.

The idea of bank cards shouldn’t be scrapped altogether, since they boost efficiency and save states money. But they deserve another look - especially as the new stimulus plan will increase unemployment benefits by $40. The goal should be to increase efficiency and help the unemployed, not the banks.

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.

This afternoon the House will probably approve the stimulus package, sending it to a Senate vote this evening. If all goes as planned, President Obama can sign the new legislation this weekend.

While main goal of the bill is to create jobs - 4 million jobs according to Obama’s directives- it also contains much needed funding to assist those who are currently unemployed. Specifically:

• Unemployed workers could receive 20 more weeks of unemployment benefits. Those in states with particularly high unemployment rates could get up to 33 more weeks;
• Trade Adjustment Assistance health benefits could be available to 160,000 more people who are out of work because their job moved over seas; and
• People who have been laid off could receive a subsidy for health insurance up to 60 percent for nine months.

The bill also includes a one-time grant for states that reform their unemployment insurance programs, making it easier for low-wage and part-time workers to apply for the assistance.

The U.S. economy lost 598,000 jobs in January, marking the largest one month job loss since December of 1972. Unemployment is now at 7.6 percent. More than 11 million Americans who want a job are out of work.

As the Senate continues to debate the terms of the Economic Recovery Package, the economy is in free fall. President Obama gets it:

“I don’t care whether you’re driving a hybrid or an SUV,” he said. “If you’re headed for a cliff, you have to change direction. That’s what the American people called for in November, and that’s what we intend to deliver.”

We are at the cliff. The Wall Street Journal reports:

Unemployment filings have soared so high in recent months that seven states have already emptied their unemployment-insurance trust funds, which were supposed to see them through recessionary periods. Another 11 states are in jeopardy of depleting reserves by year’s end, according to the National Conference of State Legislatures, which published a January report entitled “The Crisis in State Unemployment Trust Funds.” So far, states have borrowed more than $2.3 billion in emergency funds from the federal government, money they are required to pay back.

Mark Zandi, former advisor to McCain has created this graph that shows the danger of inaction:

Job loss creates more job loss. The Senate needs to speed up their compromise and get our people back to work.

Yesterday the Senate released its version of the Economic Recovery Act. However, we can expect changes since they currently lack the 60 votes to pass it.

The House and Senate versions of the bill are fairly similar. Yet, while the Senate version costs more, it offers lest assistance for food stamps - $3.5 billon less. This shouldn’t just concern those of us who care about domestic hunger. In fact, anyone who wants the economy to rebound should advocate for the House spending levels on food assistance.

Mark Zandi, chief economist and cofounder of Moody’s Economy.com and former advisor to Senator John McCain’s presidential campaign, has said that increasing food stamp benefits is one of the best ways to boost the economy. In a testimony to House Committee on Small Business Zandi noted:

More specifically, extending food stamps are the most effective ways to prime the economy’s pump. A $1 increase in food stamp payments by $1 boosts GDP by $1.73 People who receive these benefits are very hard-pressed and will spend any financial aid they receive within a few weeks. These programs are also already operating, and a benefit increase can be quickly delivered to recipients.

Comparatively, the multiplier effect of making the Bush income tax cuts permanently is only .29, the effect of cutting the corporate tax rate is .30, and making the dividend and capital gains tax permanent is only .37.

If we want to get the biggest bang for our buck, we can’t let Rush Limbaugh and Senate Republicans define the terms of the debate.

President Obama was on this Hill this morning lobbying members of Congress on the stimulus bill. The House is voting on its version today and members expect to have legislation on the President’s desk by February 13. For the next couple days we are going to highlight some of the items that may be contained in the package. First up: education.

The House bill would include $150 billion of new federal spending for education — doubling the Dept. of Educations current budget. According to the New York Times:

The proposed emergency expenditures on nearly every realm of education, including school renovation, special education, Head Start and grants to needy college students, would amount to the largest increase in federal aid since Washington began to spend significantly on education after World War II.

Other proposals include:

• $79 billion to states to help them maintain services and avoid cuts to schools and pre-k programs
• $20 billion for school renovations
• $6 billion more for Pell Grants, increasing the budget for the aid program to $27 billion from $19 billion.

Critics of the bill are concerned about wasteful spending, but if the alternative is collapsing schools and a mass lay off of teachers, then we cannot let our education system crumble with the economy.

Yesterday, House Democrats unveiled their plan for the $825 billion stimulus package that includes:

• $275 billion of tax breaks for individuals and businesses
• $119 billion of assistance to states for Medicaid, education and other critical services
• $117 billion for education
• $106 billion for assistance to low-income families in the form of an expansions to food stamps, unemployment, and short-term health insurance options for people who lose their jobs
• $90 billion for infrastructure spending
• $52 billion for green energy investments
• $16 billion of investments in science and technology
• $48 billion spending for other small scale projects

According to Isabel Sawhill, a senior fellow at Brookings, there is one important category missing from the list: investments in the non profit sector. She makes a strong case that through investments in non profits the government can:

take advantage of a huge network of institutions that work hard every day to improve the welfare of communities and individuals, that will spend the money quickly, that have the capacity to spread the dollars widely, and that in the absence of such help will need to shrink and thus become another drag on the economy.

The non profit sector is larger that I realized. In fact, as of 2006, it employed 10 percent of the U.S. work force and gave away or spent almost all of its $1 trillion in revenue. As the economy sours, non profit institutions will find it harder to serve their communities. Without added assistance, many organizations will not only have to cut back on services, but they will also have to cut back on personnel. Investing in the non profit sector can keep people employed and keep organizations that are already know the needs of their communities in business.

The Obama stimulus package pays special attention to job creation in female dominated industries…or as Christina Romer, chair of the Council of Economic Advisers, says, “We don’t want this stimulus package to just create jobs for burly men.” These positions will come from investments in education, healthcare and retail trade. Politico reports that:

slightly fewer than half the newly created jobs will go to women, about 1,529,000 of the estimated total of 3,675,000 new jobs.

The number of households who rely on women for the primary source of income has greatly increased over the past four decades. In fact, “more than 4 million more than 4 million families looked to mom as the main breadwinner, double the number in 1990.”

Kudos to Romer and other members of Obama’s team for making sure federal investments will help women as well as men.

Part of Obama’s economic stimulus package includes an expansion of the child tax credit for low income Americans. The Wall Street Journal outlines the plan here:

Mr. Obama’s advisers on Monday outlined a potential new feature of the plan to congressional aides, saying they would press for a tax change that would allow more families that earn too little to pay income taxes to claim at least some of the $1,000-per-child tax credit. That would amount to an income subsidy, since it would refund taxes they are too poor to pay.

The plan would grant an estimated 5.5 million poor children access to the credit for the first time, and expand the tax benefit for millions more poor children who currently qualify for only a partial credit, according to its advocates. The change has been sought by Democrats and some moderate Republicans for years.

As of Jan. 1, a household must earn $12,500 a year to be eligible to claim any of the child credit. The proposal under discussion would lower that threshold, likely to $3,000, a level favored by top House Democrats, at a possible cost to taxpayers of $18 billion, said individuals familiar with the discussions. Currently, a part-time working mother earning $5,000 a year would get no child credit. With a $3,000 threshold, she would get $300.

This change to the child tax credit is long overdue. Furthermore, the expansion is targeted to low-income Americans who are likely to spend those extra dollars on necessary household items. Thus, we can expect this provision to have an immediate effect on the economy.

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.