July 8th, 2009
01:34 PM ET
11 years ago

Stimulus propping up cash-strapped states

NEW YORK (CNNMoney.com) - Fiscally-stressed states are using their stimulus dollars to satisfy immediate needs rather than undertake longer-term reforms, according to a government report released Wednesday.

For example, states are spending education funds to prevent layoffs and maintain programs, a Government Accountability Office report found.

Trying to survive one of the worst economic downturns since the Great Depression, state and school district officials say they don't have the money to undertake projects such as building new schools and expanding early-childhood education.

Similarly, states are using nearly half their infrastructure funds for pavement improvements, which can be implemented quickly and don't require environmental clearances and in-depth design work.

The $787 billion recovery act walks a fine line between trying to get funds out quickly to stimulate the economy and spurring longer-term initiatives.

Full story

Filed under: CNNMoney.com
soundoff (49 Responses)
  1. Open Your 3rd Eye

    Some of you dems & liberals here are pretty naive.

    You actually let the republicans make you think twice about who you voted for.

    Are you kidding me? Remember McCain?

    Now, imagine if HE was our president.

    Obama's policies are exactly what we need, we are changing the country indeed.

    Some of you just don't have the patience to simply WAIT for these changes to bear fruit.

    Get a grip people. Capitalism is over, that's what we are changing, remember?

    July 8, 2009 03:02 pm at 3:02 pm |
  2. Hopeful Optimist

    Sounds like we got a lot of folks that missed their naptime today. My, my, what a snippy lot !!!

    July 8, 2009 03:02 pm at 3:02 pm |
  3. Bob in Pa

    The government should not be spending this money to prop up other goverment jobs. WHen will these idiots learn the world doesn't revolve around them. Cut Spending now ! Let's pull all the undistributed and unspent funds back to DC and rethink this plan.

    July 8, 2009 03:03 pm at 3:03 pm |
  4. gl, From Pittsburgh

    projects such as building new schools and expanding early-childhood education.

    How can you build a new schools when you have Governors like that cheating Standford refusing the money. It was his state that needed a new school. Sara Palin refusing the engery money. Please stop all the madness with your lies.

    July 8, 2009 03:04 pm at 3:04 pm |
  5. sam

    The Jobloss Recovery. Bush was pilloried for a job-less recovery. the great stimulus is producing a job-loss recovery.

    July 8, 2009 03:04 pm at 3:04 pm |
  6. Steph

    I don't know why states would lay off teachers and then use the stimulus money to build a new school?!?! Preventing layoffs does help the economy (less spent on unemployment benefits, people with jobs buy stuff, children aren't overloaded into classrooms, etc...) Ideally, I would love to see the new projects, but if a state was building a new school and laying off teachers at the same time everyone would be screaming.

    July 8, 2009 03:09 pm at 3:09 pm |
  7. Pat F

    State "Immediate needs": Interpreted from the government-speak means satisfying the State employees endless demands for more money and less work. The ONLY industry in this country without lay-offs or wage cuts is the GOVERNMENT industry.

    You know that person at the DMV who can't be bothered to wait on you and the other 75 people in line? Or those postal employee who are too busy yakking with each other to even notice you've come in? THEY are the ones getting your dough and condemning your kids to endless deficits.

    Wake up, America! You're being robbed to buy Union votes for the Obamessiah in 2012.

    July 8, 2009 03:10 pm at 3:10 pm |
  8. D. Tree

    I love these loony fringe "stop spending money is the only answer" comments. What world do you live in?

    With all your fawning over the "free market" you should know you don#t get something for nothing.

    The stimulus program is an INVESTMENT in our future, and is meant to be spent over the next 2 years.

    Anyone who thinks you can turn around 8 years of neglect in a mere 6 months obviously has no idea what they are talking about.

    July 8, 2009 03:11 pm at 3:11 pm |
  9. TCM

    @ Margaret –

    face it, you got duped....by all the liberal politicians...how'd you like that "Hope and Change?"

    July 8, 2009 03:11 pm at 3:11 pm |
  10. single mom

    I don't know about the other bankrupt states, but here in California there are so many 'absolutes' in the budget, required by the state's CONSTITUTION!!, that the Governor only has about 15%of the budget that he can work with to get the numbers down.
    No one here wants more taxes. (Get that, Congress?) Ooops, I forgot, one of our Assembly leaders, a Democrat, scolded the Republicans for being against 'increasing revenue' – I guess she thinks the voters will be fooled into agreeing with her. Nope. We know better. No matter how you gussy it up – taxes are taxes.
    You can call a skunk a rose, but it will still smell bad.

    July 8, 2009 03:11 pm at 3:11 pm |
  11. European-American

    Hmm, Early-childhood education? Wasn't that once called parenting? It is absolutely amazing how government has to constantly fix problems they have caused. I wish Washington would just slow down, get out of panic mode and do what is right- not simply just do something!

    July 8, 2009 03:11 pm at 3:11 pm |
  12. GOP - Best comedy act ever

    Maybe if taxes weren't cut during a time of War we wouldn't be in this mess. Maybe if we didn't start a war with a country that never attacked us we wouldn't be in this mess. Maybe if after the international community gave us support after 9/11 and we subsequently burned those bridges, we wouldn't be in this mess. Maybe if greed wasn't allowed to run unchecked we wouldn't be in this mess. Maybe if we had a president that didn't spend years on vacation, we wouldn't be in this mess.

    But, no, it's all Obama's fault. I love how short some of your memory spans are – boohoohoo, the dems are ruining my country. Were you sleeping for eight years or what?

    July 8, 2009 03:13 pm at 3:13 pm |
  13. Joanna in PA

    The stimulus is a great idea. It is what we did during the great depression. During the depression ww2 started for which we turned the auto factories into bomber assembly lines. It was the largest government works program. This spawned economic growth. along with better regulations. So basic econ 101 is supply and demand. We certainly have a lot of supply, but people are without jobs or scared to loose there jobs so demand is low. Our government is creating demand. Spending money on things we need, like better roads, more efficient schools, providing food assistance to those who can not afford it ( which is really stimulative. for every dollar spend on food stamps we get 1.53 on return) Its spending without a world war.

    Will it work? I'm not sure, but doing nothing has failed already. so doing more of the same is not going to produce different results. Bush 41 lost an election because he raised taxes. he knew that he had to, which by raising them laid the groundwork for Clinton to give us a budget surplus and end the recession of the 80ies. The currant job losses are still high, but have been cut by half the numbers we were seeing a few month ago. Homes sales are higher than expected too.

    I must ask, if we did have the need to turn our manufacturing companies into war assembly lines, would the dems be called socialist. Could it be done in todays partisan hostile environment?

    July 8, 2009 03:14 pm at 3:14 pm |
  14. Joe

    President Obama's fans who seem to turn comments about every article into I hate Republicans don't seem to have many comments on this article.

    July 8, 2009 03:15 pm at 3:15 pm |
  15. TCM

    HAHA....CNN shuts down comments after obtaining at least 100 negative comments on the article:

    "GOP slams Obama stimulus as ineffective, wasteful.."

    Typical censoring of a story; trying to entice liberal support by playing the numbers games with posts; always biased and slanted...

    In actuality, Obama supporters are losing their "party hats," at a rapid pace. The liberals are seeing for themselves that Obama's a fraud...

    July 8, 2009 03:18 pm at 3:18 pm |
  16. The Unshrub

    The stimulus package is working better than most conservatives want to admit. Maybe unemployment is still rising, but without the package, unemployment would be sharply increasing. Unfortunately, republicans are more concerned in destroying Obama than they are concerned in helping the country.

    July 8, 2009 03:19 pm at 3:19 pm |
  17. Kelby In Houston, TX

    "Fiscally-stressed states are using their stimulus dollars to satisfy immediate needs rather than undertake longer-term reforms. "

    This, by no means, constitutes a mis-use of the funds that were allocated to them. There are immediate needs that must be addressed and those issues are being handled first...that's what makes them immediate. I think we need to give stim-pack 1 more time to do its thing. We, The People can be SO impatient

    July 8, 2009 03:19 pm at 3:19 pm |
  18. RealityKing

    The republican stimulous package of 2002 now looks like pure gold when compared to the progressive stimulous package of 2009. Clearly America's media has fallen to an all new low and full of agenda driven hacks.

    July 8, 2009 03:19 pm at 3:19 pm |
  19. Chuck, Tennessee

    "The administration has said stimulus funds have already created or saved 150,000 jobs, and should create another 600,000 by summer's end. The figures are based on estimates that each $92,000 in stimulus money spent creates one job."

    So, they have no hard information to back up their claim of jobs created or saved, just their prediction that spending $92,000 will create or save one job. They apparently need to use some of the stimulus funds to buy a better calculator. The story reports $29 bil spent. Well, $29 bil divided by $92,000 is 193,000 jobs created or saved. Of course, they didn't subtract the 467,000 jobs lost in June!

    VooDoo math, VooDoo economics, Idiots and liars in charge! way to go, Obama voters.

    July 8, 2009 03:20 pm at 3:20 pm |
  20. Alfred E. Neumann

    This report should not come as a surprise since so few controls have been placed on stimulus spending.

    Members of Congress are not being held accountable because, well, it's the fox guarding the henhouse situation.

    Any controls that are in place make as much sense as some of the comments that you find on this web site.

    July 8, 2009 03:20 pm at 3:20 pm |
  21. changing my screen name to see if it helps getting my comments posted

    @ TCM,

    So what would have been better? Give massive tax cuts to already extremely wealthy people who would either not spend it or spend it on their own immidiate needs, thus having a similar result?

    Even when they do invest the money to acctually create jobs the increase in wealth for the non-wealthy is pretty small compared to the increace in wealth to the wealthy from the decreased taxes AND the subsequent return on investment from said investment of reduced taxes. Because no wealthy individual in his right mind will invest money if they did not believe it would make more for them. If they got nothing in return that would just be socialism and we can't have that.

    July 8, 2009 03:20 pm at 3:20 pm |
  22. TCM

    @Liberal and Proud of It dot com July 8th, 2009 2:57 pm ET

    Obama is running up very small deficits compared to Reagan and Bush....

    HAHAHA...you're kidding right? Obama's created more debt than all previous presidents....COMBINED! Get your numbers right; stay away from "obamasites...."

    July 8, 2009 03:21 pm at 3:21 pm |
  23. donttreadonme

    Bottom line it was a poor plan that was poorly executed. The stimulus is not working and now the media is drumming up some positive stories to write about it.

    I would like to know anyone out there who is not a union member that was actually helped out by this plan?

    States have the ability to raise taxes to pay for their own state needs it should not come from the Feds.

    July 8, 2009 03:21 pm at 3:21 pm |
  24. ProgressivelyMinded

    Clearly you people still don't get the fact that government control is better than a free market society.

    July 8, 2009 03:23 pm at 3:23 pm |
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