John Edwards for President: ARCHIVAL MIRROR

Edwards Urges Riley To Support Plan For $325 Million In Aid To Alabama To Solve Looming Budget Crisis And Avoid Devastating Cuts

Bush plan omits critical state aid from so-called "stimulus" package

Birmingham, Alabama – Today, Senator John Edwards wrote a letter to Alabama Governor Bob Riley today urging the Governor to join his call for federal financial assistance to states – including at least $325 million to help solve Alabama's looming budget crisis. Alabama is facing a budget shortfall of $784 million in the next fiscal year, nine percent of its general fund. Edwards is calling on Congress to fix George Bush's flawed economic stimulus plan by providing immediate help to states – something Edwards first proposed over a month ago.

"States like Alabama need immediate help – or we could see devastating cuts to education, health care and other basic services, along with increases in property taxes," Edwards said. "Providing this assistance to states will not only protect our schools and our most vulnerable citizens, but represents an important and critical step to avoid a recession."

On December 22 – long before Congress, the President, or any other candidate – John Edwards warned about the prospect of a looming recession and proposed an economic stimulus plan that includes extended unemployment benefits, investments in the renewable energy industry to create jobs within 90 days, a Home Rescue Fund to help families avoid foreclosure, and immediate federal financial assistance to states.

Today, Edwards emphasized the need to increase the federal contribution to Medicaid and provide additional aid to states, helping them avoid cuts to education, health care and other basic services and avoid increases in property and other taxes that disproportionately impact working families and seniors on fixed incomes. Under Edwards' plan, Alabama would receive at least $325 million in direct aid to help avert those cuts and stimulate the state's economy.

Federal assistance to the states provides more "bang for the buck" than almost any other form of short-term economic stimulus. It provides five times more economic benefits than business tax breaks, according to a study by Mark Zandi of Economy.com. Nobel Prize-winning economists reached a similar conclusion in a recent New York Times op-ed essay emphasizing extending unemployment insurance benefits and direct aid to states and localities.

With Congress considering the Bush stimulus plan this week, Edwards called on members of Congress to act quickly to provide this important relief to states.

Edwards' letter to the Governor is below:

Senator John Edwards
January 30, 2008
The Honorable Bob R. Riley

Dear Governor Riley:

As you know, this week Congress is debating important legislation to create jobs and restart the economy. I am writing to urge you to join me in calling for federal financial assistance to Alabama as part of this plan. Alabama needs our help now.

Back in December, I proposed a plan that would increase the federal contribution to Medicaid and provide additional aid to states, helping them avoid cuts to education, health care and other basic services and avoid increases in property and other taxes that disproportionately impact working families and seniors on fixed incomes.

In contrast, the kind of stimulus plan requested by President Bush and now working its way through Congress is another example of Washington deserting working people and the middle class. It gives $50 billion of tax breaks to businesses, doing nothing for those who have lost their jobs. It is a complete disconnect between what's happening in Washington and what is happening in Alabama and across the country.

Alabama is facing a budget deficit of $784 million in the next fiscal year. Without help from Washington, the state legislature will have little other choice but to make cuts to essential services like health care and education. Under my plan, Alabama would receive approximately $325 million in direct aid to help avert those cuts and stimulate the state's economy.

Federal assistance to the states provides more "bang for the buck" than almost any other form of short-term economic stimulus. It provides five times more economic benefits than business tax breaks, according to a study by Mark Zandi of Economy.com. Nobel Prize-winning economist Joseph Stiglitz reached a similar conclusion in a recent New York Times op-ed essay emphasizing extending unemployment insurance benefits and direct aid to states and localities.

I also believe that the economic stimulus package should expand unemployment benefits to cover more poor families and those who have lost their jobs. Otherwise we are going to have thousands and thousands of families across our country who don't get the unemployment help they need, though they lost their jobs through no fault of their own. We also need tax rebates that provide no less to low-income families than to the rest of us, new investments to build infrastructure for the clean energy economy that will create jobs and fight global warming, and more help for the millions of families facing foreclosure.

President George Bush opposes state aid, but Congress needs to stand its ground. I urge you to join me in insisting on a plan that provides direct financial assistance to Alabama.

Sincerely,

John Edwards