Stimulus Deal Restores Some Aid To States Senate negotiators on the economic stimulus bill say a small but contentious provision to aid states has been partially restored. Some funds to help states deal with falling revenues were reinstated following a last-minute lobbying effort by governors.
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Stimulus Deal Restores Some Aid To States

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Stimulus Deal Restores Some Aid To States

Stimulus Deal Restores Some Aid To States

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House and Senate negotiators have settled on an economic stimulus bill with a price tag around $790 billion. Both chambers passed their own versions of the measure. Now they've bridged their differences and appear to have come up with a bill that they can send to the president. One of the many differences between the House and Senate versions was a $25 billion pot of money called, the state stabilization fund.

The money is intended to help plug holes in state budgets as tax revenues fall. Yesterday, the Senate deleted that provision from the bill, and governors fought to get it back.

Here's NPR's Peter Overby.

PETER OVERBY: The rap on the state stabilization fund has been a lack of oversight. Last week, Budget Committee Chairman Kent Conrad called it a slush fund.

Senator KENT CONRAD (Democratic, North Dakota; Budget Committee Chairman): There is absolutely no strings attached. Governors can use it for any purpose.

OVERBY: But here is what Ohio Governor Ted Strickland is looking at.

Governor TED STRICKLAND (Democratic, Ohio): Some terrible, terrible choices.

OVERBY: The economy has blown big holes in the Ohio state budget. Strickland said the stabilization fund would give Ohio about $1 billion and avert some huge problems.

Gov. STRICKLAND: We believe that perhaps 500 employees in our correctional system would be terminated, that there would be as many as 51,000 Ohioans who would lose mental health services and that as many as 5,200 mental health providers would lose their jobs.

OVERBY: And as for that slush fund accusation…

Gov. STRICKLAND: I would welcome the Senate putting specific constraints on how those resources can be used.

OVERBY: But the stimulus bill was already on a fast train to the White House. Strickland wrote an urgent letter to Ohio's members of Congress. He got on the phone to them and to other governors who also wanted the money restored. Other governors made calls to the House, the Senate, the White House. There wasn't time for much more lobbying than that.

Mr. SCOTT PATTISON (Director, The National Association of State Budget Officers): Things are happening pretty fast.

OVERBY: That was the assessment from Scott Pattison, Director of the National Association of State Budget Officers.

Mr. PATTISON: It would be hard to put together a huge grassroots organization that you haven't already been utilizing at this point.

OVERBY: And governors had another concern - balancing the loss of stabilization funds against everything else in the stimulus. Ed Rendell is governor of Pennsylvania, and chair of the National Governor's Association and an ally of President Obama.

Governor ED RENDELL (Democrat, Pennsylvania; National Governor's Association Chair): I can't emphasize this strongly enough, we, neither myself, nor my fellow governors, are complaining. If the cut remains in the stabilization fund, we'll find a way to make it work.

OVERBY: Pennsylvania Republican Arlen Specter helped write the Senate Bill that deleted $25 billion. The other two Republicans in that session were Susan Collins and Olympia Snowe, both from Maine. But Maine's Governor, Democrat John Baldacci said his budget for next year doesn't anticipate any boost from the Feds and he is not mad at Collins and Snowe.

Governor JOHN BALDACCI (Democrat, Maine): And we think that our two senators are standing right up there and should be recognized for their leadership.

OVERBY: This afternoon Senator Collins said negotiators have restored some of the money.

Senator SUSAN COLLINS (Republican, Maine): And we were able to come up with a stabilization fund that will help the states close holes in their budgets.

OVERBY: Some holes, at least. Sources told NPR the fund is much smaller than the original $25 billion.

Peter Overby, NPR News, Washington.

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