The economic news from Raleigh and Washington this week is gloomy, but comes amid new evidence that policymakers don’t have to sit idly by and wait for things to turn around for struggling families.
State revenues are $110 million behind projections, according to Barry Boardman, the top economist at the General Assembly. Most of that is due to the sagging sales tax, hardly a surprise with unemployment hovering around record levels.
Legislative budget writers are bracing themselves for a shortfall of as much as $400 million when the General Assembly returns to Raleigh in May to make budget adjustments.
Though it is little consolation, North Carolina is not alone. Boardman says that 43 states are concerned or pessimistic about their revenue outlook in the current fiscal year and 38 states report sales tax revenue lagging behind projections.
The national economic downturn continues to take its toll on millions of families. And it could have been a lot worse. The Center on Budget and Policy Priorities released a report Thursday that finds the economic recovery act passed by Congress earlier this year is keeping more than 6 million Americans out of poverty and reducing the severity of poverty for 33 million more.
The report says the expansion of food stamp benefits, tax credits for working families, unemployment assistance, and the one-time payments to people with disabilities and veterans in the recovery act are keeping more than over 200,000 people in North Carolina from falling into poverty.
The Center says the numbers are conservative and do not take into account the parts of the stimulus plan that the Congressional Budget Office says have saved or created up to 1.6 million jobs.
And there is more to do. The House this week passed a jobs bill that will extend unemployment benefits another six months, extend COBRA health insurance subsidy for people who have been laid off, and renew a small business loan program.
As many 200,000 people in North Carolina will lose their unemployment benefits at the end of the year unless the new jobs bill passes the Senate and is signed by President Obama.
Nobody expects a dramatic decrease in the unemployment in the near future. Boardman says it will be well into 2010 at the earliest before the employment improves significantly. Those workers can’t make it until the summer without help no matter how much they want to work if there are no jobs available.
The House jobs bill tries to address that problem by investing $48 billion that banks have repaid the federal government in highways, transit, and jobs programs.
It is often popular these days to complain about the government, but public investments and assistance made earlier this year are literally helping millions of families weather the storm of the worst economic crisis in 70 years. It is not nearly enough but it’s something that is making a difference.
The new jobs bill will help families too. It’s easy for some folks in Congress and the think tank world to complain about the stimulus plan or the new push to extend unemployment and health care benefits. It runs counter to their anti-government, free-market orientation.
Thank goodness enough folks in Washington are ignoring the naysayers who’d rather do nothing and let families flounder on their own than extend a helping hand. Rigid ideology doesn’t pay the rent or buy a family enough food to eat.