Local Politics

Federal jobs bill could cause state deficit to balloon

Posted May 28, 2010

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— A jobs bill passed Friday by the U.S. House could add another $500 million to North Carolina's budget deficit for the coming year.

The $93 billion package of jobless benefits passed only after Democratic leaders jettisoned provisions that would have provided extra federal economic stimulus money to states and extended health insurance subsidies for unemployed workers.

U.S. Congress Congressional action affects N.C. budget

State lawmakers included $500 million in stimulus funds under the Federal Medical Assistance Percentage, or FMAP, program in their accounting for the 2010-11 budget. In their proposed spending programs, lawmakers moved money out of Department of Health and Human Services programs and intended to plug those holes with the FMAP funds.

"It's too big a hole for us to go in and just cut our budget some more because we've cut very very deep at this point," state House Majority Leader Hugh Holliman said.

Deeper cuts would devastate education and cripple health and human services, House and Senate leaders said. They predicted that thousands of jobs would be lost.

The U.S. House could reconsider the FMAP provision when members return from a 10-day Memorial Day break, but many Democrats said they wouldn't support more spending. Even if its added back in, the bill still must pass the Senate.

"In Washington, they're going to have to get focused and look out here at this economy and see what's going on," state Senate Majority Leader Martin Nesbitt said. "I think they'll see the light, and I think the money will be forthcoming. That's what I'm betting on."

Timing for any addition help from Congress is critical, though, since the new fiscal year starts July 1 and the lawmakers must approve a balanced budget.

"If it's not here by the time we finish our budget, we'll have to go to Plan B," Nesbitt said.

That backup plan might involve passing a budget that includes the $500 million in stimulus funds and then returning later in the summer for a special legislative session if the federal money doesn't materialize.

"I have talked to our congressional office," said state Sen. A.B. Swindell, co-chairman of the Senate Appropriations Committee. "That's the advice they give me. We just don't know right now, but we're hopeful this will happen. We have to have some hope."

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  • hardwork919 May 28, 2010

    I'm still not seeing how this bill brings about jobs...

  • geosol May 28, 2010

    "Riots and violence."

    This coming from the same person who just yesterday wrote here that the BP Gulf spill was not a "major spill" All you need to know.

  • Worland May 28, 2010

    The National Debt topped $13T days ago. Since the Dems refuse to pass a budget, we don't even know if the projected $1.53T deficit this year is even accurate. The entire GDP was only $14.2T.

    Someday soon, the gov't is going to have to cut back on spending... and I mean really cut back. We'll end up like Greece. Riots and violence.

  • changein2016please! May 28, 2010

    I still can't get pass the 10 day Memorial Day vacation!

  • colliedave May 28, 2010

    The $93 billion package of jobless benefits passed only after Democratic leaders jettisoned provisions that would have provided extra federal economic stimulus money to states and extended health insurance subsidies for unemployed workers

    and who is the source of these monies? The tooth fairy? One of these days China will cut off the funds as a proper barkeep does to a drunk.

  • specious May 28, 2010

    There's no way to pay the national debt off. Too steep. How come everybody doesn't see that?

  • ckblackm May 28, 2010

    Good thing employment is so great in the private sector... all those soon to be laid off govt. employees will be able to just move over and grab a new job.

  • mep May 28, 2010

    13 TRILLION in debt, 1.5 TRILLION deficit for this year.... time to make the BIG cuts in spending... and yes, a whole lot of people are going to hurt. But 13 TRILLION dollars in not going to "magically" disappear.... taxpayers are going to have to start paying it off, as will my children, and grandchildren.
    If not, the debt gets bigger, more difficult to pay off, and just like credit cards, the interest rate goes up and soon the hundreds of billions we are paying goes towards nothing but interest. Here is a hint: LESS GOVT entitlements, social programs, and personnel!