Douglas hopes states get bailout in next economic stimulus package

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(Host) Governor Jim Douglas hopes Congress will offer state governments a bailout when it takes up another economic stimulus plan.

Douglas and a group of the nation’s governors will meet with President-elect Barack Obama next Tuesday to discuss the proposal.

VPRs Bob Kinzel reports:

(Kinzel)Douglas says a financial rescue plan for individual states is needed because most states are facing the same difficult budget decisions that confront Vermont.

Douglas currently serves as vice chairman of the National Governor’s Association, and he says he’s been working closely with the chairman of the NGA, Pennsylvania governor Ed Rendell, about drafting a specific plan to assist the states.

The governor says they’ll present their proposal to President elect Obama next Tuesday at a special meeting in Philadelphia:

(Douglas) "I’m not counting on it but I would welcome it, it would be very helpful to our state’s economy and to our budget exercises remember that in addition to the General Fund and the Transportation Fund challenges that were facing we still have a projected shortfall in our Medicaid budget… it’s probably the order of magnitude of 30 or 40 million dollars so additional assistance from the federal government for Medicaid would be very welcome."

Douglas says it’s critical that the plan gives states as much flexibility as possible in using any new federal funds:

(Douglas) "We recently received nearly 20 million dollars for foreclosed homes to convert them to housing for needy families and that’s great we welcome it it’s going to create some construction jobs and help some Vermont families find a place to live but it would have been an even better I think to be able to use it to prevent foreclosures to keep people in their homes and that’s the kind of lack of flexibility that limits our options as to how we deploy these federal dollars."

Senator Bernie Sanders wants Congress to pass a second major stimulus package and Sanders says new financial aid for the states should definitely be part of the plan:

(Sanders) "Our states including the state of Vermont and many other states are facing serious economic problems they’re laying off people there are going to be cuts in essential services which is only going to exacerbate many of the economic problems facing lower income people and working families as unemployment increases so we need to be sure that states and cities get help."

Sanders and Douglas say they’d like to see Congress pass this plan in the next few weeks but they both acknowledge that it’s unlikely that the current Congress and the Bush Administration will support this approach.

For VPR News I’m Bob Kinzel in Montpelier.

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