Out of Control Policy Blog

No Bailouts In Sight for Cash-Strapped States

Most coverage of President Obama's State of the Union address has focused on what was said. However, yesterday John Gramlich of Stateline-a project of the Pew Center on the States-focused on what was not said:

Obama's State of the Union address left little doubt that more federal assistance to the cash-strapped states is unlikely. The president outlined a five-year freeze on annual domestic spending and - unlike when he signed the stimulus plan into law nearly two years ago - did not mention the ailing condition of state finances.

Similarly, on Monday The Wall Street Journal reported House Majority Leader Eric Cantor (R, Va.) saying bluntly, "There will not be a federal bailout of the states."

So what's the underlying message over the past week to cash-strapped capitols around the country? Essentially, "you're on your own."

Public officials need to be creative to in the coming years to meet the fiscal challenges ahead. One excellent resource they should reference is the State Budget Reform Toolkitreleased yesterday by the American Legislative Exchange Council (ALEC).

Harris Kenny is Policy Analyst


« SOTU Offers Little Substance on… | Main | Cutting Defense Spending »




Out of Control Policy Archives