Local news and national papers alike have been replete with the troubling real results of the growing state budget shortfalls. These stories have broken down the astounding figures – $65 billion and $70-$85 billion budget gaps in FY 2003 and FY 2004, respectively – into their real, daily effects on ordinary citizens. By now, Kentucky’s decision to release prisoners before their sentences were up has become the poster-child for desperate states and their drastic budget-balancing measures. In other similar high-profile cost-saving efforts, some school districts in Oregon and Colorado have turned to a 4-day school week; others have stopped buying new textbooks; still others have cut school athletic and marching band programs; in some districts in Oklahoma, the schools have stopped hiring substitute teachers and are, instead, looking to parents to fill in for teachers. According to the International Association of Firefighters, the state and local budget gaps have resulted in layoffs, station closings, and other reductions in staff, even as new Homeland Security Secretary Tom Ridge calls on local contributions for domestic security.

This chart compares the Bush plan to the Democratic plans: the Baucus and Pelosi economic stimulus plans. To see what goes into a good economic stimulus plan, see this chart

Only 9 billion dollars separates the House and the Senate Budget Committee FY 2003 discretionary spending totals, but this small divide has been widened by continuing efforts to limit spending on domestic programs. Each of the budget proposals that has been put forth calls for reductions in this year’s real per capita spending from last year’s levels. Yet a recent analysis from the Center on Budget and Policy Priorities (CBPP) argues that we are nowhere near a discretionary “spending explosion,” in either domestic or military spending.

The House and Senate, by votes of 417-3 and 85-9 respectively, have finalized “economic stimulus” legislation, and it is now on its way to the President, who is expected to sign the bill. The bill’s title -- “Economic Recovery and Assistance for American Workers Act of 2001” -- is misleading given that it is overloaded with huge tax breaks that will do little to stimulate the economy and the provision for unemployed workers and their families is limited to a 13-week extension of unemployment benefits to those whose 26-week benefit limit has expired.