I hope you all had a nice Thanksgiving. I am glad to be back on the campaign trail, fighting to fix our broken economy and restore the American Dream for millions of hardworking middle class families.
We are in a painful recession. Too often it seems like DC hears more about the concern of billionaires who don't want to lose their tax cuts, and too little about the parent of two who works long hours and barely is getting by. And yet Congress votes on whether the billionaire will have more, and whether the working class parent will lose his or her job. These are the votes presently occurring, and which are being treated like a drawn out political game.
The proposed Federal budget cuts are turning into another political sideshow. The process of the budget is being treated as a chess game, a battle over politics and procedure, and one that may go on for a long time still, narrated by talking heads throughout.
If you are an American in need of a job, or one afraid that your job will be cut in the budget proposals, it isn't just a DC soap opera. The reverberations of the proposed cuts are drastic and personal. States and cities throughout the country feel the impact of the cuts through the stories of those waiting with every news cycle to hear whether their job, or hope of a job, will be slashed.
The City of Los Angeles is a perfect example of this harm. Los Angeles is already affected by the recession with a whopping 14.5% unemployment.
The proposed federal budget cuts are not abstract to Los Angeles. They would eliminate funding for job creation projects, projects needed to help Vets find work, and they could wipe out training services for youth hoping to find skills, or the homeless, hoping to break the cycle of poverty.
In Los Angeles, the community is not sitting back and letting these proposed cuts happen without a fight. Next Wednesday, March 23rd, Angelinos will rally at the Federal Building in Downtown Los Angeles to say no to such cuts. Cutting jobs is not the answer to recession budgeting. It's time that our government prioritized working people over billionaires.
If democracy is to work, we have to hope that Wisconsin and Los Angeles, and the other communities that have had enough, send messages strong enough to penetrate the walls of Capitol Hill. It's time our government support those struggling to get by, and not just those with the money to access power in private backrooms. It's time we make it know: budget cuts equal job cuts. And America simply can't afford to cut anymore jobs.
As I pick up the pace of work again, coming into the midterms, I have to get some stories cleared off the desk in order to make room for some others, and that's what we're about today.
We'll be talking about saving more than 300,000 of this country's most important jobs, and paying for it in a way that is not only good policy, but is a real problem for Republicans who are yelling "no new taxes!" once again while pretending they care about actually paying for actual spending and actually want to cut actual unemployment.
We have a bit of work to do today, but we want to keep it somewhat short...so let's get going.
What does it mean to sell something short? I always thought it meant that you just didn't appreciate the value of something. But on Wall Street, there are two types of bet, one expecting eventual appreciation of the value - a long position - and one expecting the value of the investment to fall - a short position. A short position means you will borrow the security from someone and sell it, and then buy it back later, hoping in the meantime that the stock as fallen. Indeed, it is "selling short" instead of "buying long."
Of course, we remember the $550 million penalty slapped on the wrists of Goldman-Sachs for their recent double-dealing, where
"hedge fund Paulson & Co. helped pick the underlying securities and bet against the investment vehicles."
Basically, a short position means you are betting against the company or fund. If you have any control of the company or fund, this is highly improper because you can easily undermine the value by making bad decisions, something no one expects you to do, and thus the penalty for Goldman Sachs.
But this is indeed exactly the position the Republicans find themselves. If they can make the economy stay really bad through the election, they may actually gain power by making the Democratic majority and Obama/Pelosi/Reed look terrible. In their view, they find it advantageous to bet against America, and to do all they can to make sure we stay in this recession, or better yet, if we can double-dip, that would make them even happier.
What do they do?
Well, they vote as a block against financial reforms designed to help keep our economy stable. They want everything unstable, for consumers to be ripped off by credit-card companies and unscrupulous banking practices. They want the consumer down and to stay down. Another meltdown, in fact, would be great right now.
Secondly, they voted against the extension of unemployment insurance benefits. Of course, they know that the vast majority of people out of work right now are in that predicament only because of the economic melt-down that started in 2008 and has only barely reached the bottom. It has nothing to do with the idea that these workers want to be out of work. They don't, they want to get bak to work, as as soon as possible.
Unemployment insurance payments is one of the most effective ways to boost the economy, since these families will immediately spend this money for their basic needs and outstanding bills. As each person is paid, they pay others and that boosts the economy like nothing else.
Except for one thing. You see, the condition of our economy is largely what we say it is. When everyone says it is bad and no one is spending money, no one spends money and it is bad alright. However, as people start to feel a little better, they start to spend more, and that money circulates and gets the whole thing going again. But if we keep saying it is absolutely terrible, it will stay that way even longer.
So I doubt you will hear the Republicans start saying the economy is looking brighter, even if it is. They want it to be bad. They want the Democrats to fail, and they want America to fail. They are betting against American and they are selling it short.
Such a bet isn't illegal, but it should be. Our representatives should be working for America to succeed, not to fail. Those who are betting against America must be removed from office before they ruin our economy even more.
Carly Fiorina. She was against unemployment benefits before she was for them. Not to buy-in to the right wing ridiculousness surrounding John Kerry, but Carly Fiorina, it seems, has had a change of heart. During the primary, she couldn't find enough ways to say that she was a conservative that would stand up for all the crazy that is the California GOP electorate. Even going so far as to say that she supported Sen. McConnell's position of prioritizing political gamesmanship over ensuring that millions of Americans had the ability to pay rent and eat next week.
or several weeks, Fiorina had said she supported extending the jobless benefits, but not without spending cuts to balance the bill's $33.9-billion cost. Speaking Tuesday morning on KGO-AM (810), Fiorina shifted her position, supporting the extension even though Congress has not specified spending cuts to offset it.
"I probably would vote for this extension, but I'll tell you what, I think it is absolutely appropriate for people to stand on their desks and say, 'When is it that we're finally going to do what needs to be done and cut government spending?' " Fiorina said. (LA Times)
But, you know, Carly reads polls. And she knows this issue is not a winner here in California. So, she'll hop scoot and jump towards the middle. But the fact is, that once she lodges herself in the Senate, you can bet your last dollar that when push comes to shove, she'll be right there with McConnell and James Inhofe.
Our so-called "representatives" up on Capitol Hill once again proved that they only represent the wealthy and corporate America, not the "little" people who voted to get them elected. Sure, there are a few who agree with their politics, but they are living mainly in Texas. (No offense is intended towards my wonderful friends in TX, but we aren't always on the same page when it comes to politics and human rights)
This month approximately 1.2 MILLION jobless Americans will have no income to buy food, pay mortgages or to put gas in their vehicles to go out and search for work. In fact, they won't be able to make the vehicle payments and will lose them as well.
Why? Because all of the Republicans who voted on this package and a minority of right wing Democrats decided that it made more sense to close a tax loophole enjoyed by the richest of Americans - NOT you and me. The companies and banks chose to hoard OUR money given to them in the bailout instead of using it to hire more workers (which would have stimulated the economy).
Twenty-five thousand jobs and $2.3 billion dollars. That's what California stands to lose if Toyota follows through with its plan to shut down the New United Motor Manufacturing, Inc. (NUMMI), plant in Fremont at the end of the month, according to a study released today by a Blue Ribbon Commission. The Commission, appointed by State Treasurer Bill Lockyer, was tasked with assessing the economic, social, and environmental costs of Toyota's planned closure of the state's only auto assembly plant.
UC Berkeley Professor Harley Shaiken, chair of the Blue Ribbon Commission:
NUMMI is in the heart of Toyota's most important U.S. market, NUMMI has Toyota's most skilled and experienced workforce in the country - one that has consistently won industry acclaim for quality - and California is at the cutting edge of both technological innovation and the green future the company wants to lead. NUMMI and its highly experienced and skilled workers should be valued by Toyota as a key asset for the company as it struggles to reestablish its reputation for quality and green innovation.
The Commission's report validates what we already know -- there are no good reasons for closing NUMMI and many good ones for keeping it open.
For more than 25 years, thousands of workers in northern California have committed their lives to producing high-quality Toyotas at the Bay Area's New United Motor Manufacturing Inc (NUMMI) auto plant, and hundreds of thousands of car-buying Californians have made Toyota the #1 car company in the state. So when Toyota announced last year that it plans to close down the NUMMI plant on April 1, 2010, the company dealt an undeserved punch in the gut to California's workers and consumers, not to mention our state's already faltering economy.
Toyota's plan to close down NUMMI is the latest in a string of remarkably poor management decisions from the Japanese automaker, which is still in the hot seat after the recent rash of recalls of millions of Toyota vehicles worldwide. As the company struggles to regain consumer confidence, Toyota has absolutely nothing to gain by closing the plant, and both Toyota and California have just about everything to lose.
On November 19th, 52 UC Davis students were arrested after peacefully protesting the new 32% fee increases established by the UC Regents. As a second year undergraduate, I was hopeful that students were beginning to see the bigger picture: California is broken.
Students, so far, have been forcing most of the blame on the UC Regents. While it is true that the 20 Regents who voted for the increase certainly deserve a heaving portion of the blame for borrowing tens of millions (from a non-CA bank, NY Merrill Trust) while forcing students into a cycle of debt in order to protect UC's eerily superb bond rating, the only way for students to move towards enacting change is to recognize that UC's woes are symptomatic of the larger disease that has infected the entire state.
The UC student, to widen the umbrella for a movement that might have the capability of rallying support for reform, should understand that he or she risks turning people off by angling attacks towards the Regents and the Regents only. It is important to recognize that while it is a travesty that UC is becoming an unaffordable option for many California families, it is nearsighted to think that UC fees are anything more than a slice of the pie that is California's broken political system. The state workers that have been furloughed, the elderly Californians that are losing their access to Medicare, the thousands of previously middle-class Californians that have had their homes foreclosed, and the over 12% of California that is unemployed might tell students that UC is not the only government program that is underfunded, mismanaged, and increasingly unavailable to the people who need it.
Late last week we learned that California's unemployment rate dropped 0.1% in September, from 12.3% to 12.2%. That stat obscures far more than it reveals, including the fact that the 12.3% rate for August was an upward revision of the earlier reported number.
More significantly, the stat is not an accurate reflection of the job market in California. We actually lost 39,000 jobs in September. The only reason the rate appears to have dropped is that a significant number of the long-term unemployed have stopped looking for work and are no longer counted as "unemployed.
Nearly 1/3 of those lost jobs came from the public sector, as Steven Levy explained:
The state's job losses were especially pronounced in construction, which lost 14,100 jobs over the month, and government, which lost 12,700.
Cutbacks in government employment, which includes public schools, are partly to blame for the state's lackluster performance this month, said Stephen Levy of the Center for the Continuing Study of the California Economy.
"We are disproportionately hit in the government sector because our state and local governments are having worse budget shortfalls than in other states," he said. (LA Times, 10/17/09)
As Atrios said, that's not the way it's supposed to work. Government needs to be the employer of last resort, especially in a state that has the highest unemployment levels in 60 years. When 12,700 government employees lose their jobs, that translates into less consumer spending, which in turn means pressure to lay off more workers, all of which results in less tax revenue for the state, which merely exacerbates the vicious circle.
Yet Arnold Schwarzenegger simply doesn't care about the unemployment crisis. Instead of working to create private sector jobs through the preservation and expansion of public sector jobs, Arnold has engaged in a right-wing shock doctrine attack on the basic services of the state, an attack that was never going to succeed before the recession hit.
Once upon a time conservative Republicans claimed job creation was their #1 task, and that we had to give corporations whatever they wanted to create jobs - tax cuts, regulation cuts, etc. California did so - and as a result we have a far larger recession and unemployment numbers than we've ever had when Big Government supposedly ruled our political economy.
Today, you'll hear nary a peep out of the Republican Party about jobs. Sure, the Cal Chamber will publish its list of "job killer" bills, but that's only the public excuse to give Arnold the reason he needs to veto bills he'd have vetoed anyway. Instead you have a party that simply does not care about unemployment and the jobless. Instead, to hear Chuck DeVore tell it, the unemployed should just leave California.
California Republicans see unemployment as an unalloyed good, something to be embraced as a tool to destroy what remains of the New Deal and create a working class utterly dependent upon and unable to resist corporate power. California's economic policy has become nothing short of kleptocracy, justified by a constant media drumbeat demanding greater spending cuts, apparently for their own sake.
It is up to Democrats and progressives, then, to make the case to California that jobs matter, that jobs are what this state desperately needs, and that Republicans have not just given up on providing jobs, but are actively cheerleading unemployment and attacking the jobless.
Of course, we don't need jobs for their own sake. We need quality jobs, jobs that pay a living wage, jobs that are sustainable and not dependent on the latest asset bubble Ponzi scheme. And just as we learned in the 1930s, we need government to step in and provide them - instead of actively destroying them.
What leaped out of last Friday's pathetic jobs report for a lot of people was the significant drop in employment for government workers, particularly at the state and local level:
The latest jobs numbers from the Labor Department are out. In the past, we've noted the protected status of government workers. While private sector payrolls were falling like a stone, government employment at every level was growing. In recent months it had been falling slightly, but still remained above its pre-recession levels.
No more. In September, state and local government payrolls fell below the levels of December 2007, when the recession began. The declines indicate the pain that state and local governments are feeling from severe budget shortfalls, despite the $787 billion stimulus package last winter.
There's a very good reason that the stimulus package failed to avert this drop in state and local government payrolls. During the stimulus debate, Presidents Ben Nelson and Susan Collins decided to drop $40 billion dollars in state-based aid that would have gone directly to saving these jobs. Presumably faced with no choice to clear the 60-vote cloture hurdle, Democrats and the Administration went along, and that state aid vanished. So unsurprisingly, as a result, state worker jobs have vanished right along with it. That translates to hundreds of thousands of jobs all over the country that would have meant hundreds of thousands more consumers with spending money, hundreds of thousands more people off the unemployment insurance rolls and contributing to state budgets rather than taking from them, hundreds of thousands more people providing help and aid to others who have trouble getting it due to scaled-back state workforces.
It was a terrible, terrible idea. Especially because the woes for state budgets are only beginning, and what aid did come with the stimulus will probably run out before state economies recover.
History suggests it could take six or more years for sales and income taxes - which make up roughly two-thirds of states' revenue - to return to pre-recession levels. That augurs deeper cuts to state jobs and services in order to maintain funding for core programs such as public schools and Medicaid.
What's different from the three previous recessions, which took states three to five years to recover from, is that employment and consumer spending aren't expected to bounce back as quickly.
To balance their budgets in the meantime, states are likely to further raise taxes on the money people earn and spend; increase college tuition; reduce funding for the arts and other cultural programs; and push costs into the future by delaying pay raises for employees and repairs of government buildings. Some states, including Massachusetts, Missouri and Arizona, already are making or considering fresh cuts just months after lawmakers agreed on new budgets.
I would say that $40 billion dollars in direct aid could have gone a long way right now and in the future. But instead, we are ruled by neo-Hooverists.
Fourteen states and the District of Columbia reported jobless rates of at least 10.0 percent in August. Michigan continued to have the highest unemployment rate among the states, 15.2 percent. Nevada recorded the next highest rate, 13.2 percent, followed by Rhode Island, 12.8 percent, and California and Oregon, 12.2 percent each. The rates in California, Nevada, and Rhode Island set new series highs.
So much for that canard that businesses are flocking to Nevada, considering it has a higher unemployment rate than we do. Nonetheless, California is in deep trouble, with a loss of 741,000 jobs over the last year, an increase of 4.6% in the jobless rate since last August.
And there are no economic recovery plans in the works. I guess we're supposed to sit and wait until things get better.
Perhaps the rumors of a recovery aren't yet reaching the ears of California employers, because these numbers aren't all that recovery like.
Despite signs an economic recovery has begun in the state, California's unemployment rate inched up in August, once again setting a new postwar high at 12.2%.
The state is one of 14 in the nation with an unemployment rate in the double digits, the Bureau of Labor Statistics reported this morning. Only Michigan, Nevada and Rhode Island, at 15.2%, 13.2% and 12.8%, respectively, have higher unemployment rates than California. The national unemployment rate in August was 9.7%. (LAT 9/18/09)
Now employment is a lagging indicator of economic health, because employers like to be sure business is picking up before they hire workers back. So this very well could be that the economy is recovering, but just not yet for jobs. However, here in California the job situation is quite bad, and the addition of more state budget cuts as we move forward into the fiscal year and next won't help either. It's going to be a sloooooow recovery here.
Senate Democrats have sent a letter to Governor Schwarzenegger asking him to reconsider his veto of the renewable energy standard and subsequent executive order. The strongly worded letter has about as much currency as the eleventy billion-dollar bill, but it does explain why the Governor's hypocritical action is a bad deal for California.
Respectfully, an Executive Order does not have the force and effect of law. Additionally, such a proclamation will only cause confusion and uncertainty to California's energy markets, jeopardizing California's role as the world leader in renewable energy development and green jobs.
As you noted when you signed AB 32, the landmark "Global Warming Solutions Act of 2006," administrative actions are no substitute for a statute that is permanent and enforceable.
Directing the California Air Resources Board to implement an RPS program is a fundamentally flawed approach. The CARB is not an energy agency; it is an air quality regulatory agency. There are numerous provisions of law which impair the CARB's ability to implement a renewable portfolio standard. Assigning this new responsibility to the CARB will not result in new renewable energy being built soon--it will only lead to litigation, regulatory confusion, and delay.
In our view, it is essential to green businesses and the renewable energy investment community which bring jobs and capital into California, that California's 33% RPS be statutorily established and not subject to the whims of changing administrations.
There's only one reason that Schwarzenegger gave the CARB the ability to implement a renewable energy standard - so he can go on talk shows and crow that he's instituted an environmental achievement. Except, as is explained here, it won't. It will get tied up in court challenges and confusion, without a clear mandate for the standard or penalties thereto.
Schwarzenegger has responded to this by calling the Legislature's bill "protectionist," and saying that if we get water from the Colorado River, we should be able to get renewable energy from other states as well. The difference is that a commodity is not the same as a job. The twin goals of a renewable energy standard are to spur the usage of renewables as a means to lower greenhouse gas emissions, and to build a green-collar economy that will create millions of new jobs. Schwarzenegger would rather give those jobs away. And given the perilous state of the economy here in California, we simply cannot afford that.
Job losses in the public sector will prolong the economic pain in California through 2010 even as a recovery gets under way nationwide, two forecasters predict.
Jeff Michael, a forecaster at the University of the Pacific, said Tuesday that California's recession will be over before the end of the year. But the cutbacks in state and local government, along with the continuing fallout from the mortgage meltdown, will make 2010 feel like another year of recession, Michael said in UOP's latest quarterly forecast.
Similarly, the newest UCLA Anderson Forecast predicts a sluggish recovery because of the weak public sector. UCLA senior economist Jerry Nickelsburg is more optimistic than Michael about the housing market, and says California will outperform the U.S. economy starting in 2011.
Yet both economists say Californians can expect continued high unemployment for a couple more years or so. The unemployment rate is currently 11.9 percent in California and 11.8 percent in greater Sacramento.
And yet here is Arnold Schwarzenegger vetoing the only major bill that would produce any semblance of an economic recovery for California.
Something bad happened in the past 10 years to young workers in this country: Since 1999, more of them now have lower-paying jobs, if they can get a job at all; health care is a rare luxury and retirement security is something for their parents, not them. In fact, many-younger than 35-still live at home with their parents because they can't afford to be on their own.
These are the findings of a new report, "Young Workers: A Lost Decade." Conducted in July 2009 by Peter D. Hart Research Associates for the AFL-CIO and our community affiliate Working America, the nationwide survey of 1,156 people follows up on a similar survey the AFL-CIO conducted in 1999. The deterioration of young workers' economic situation in those 10 years is alarming.
Our financially broke State of California has impacted my life in a number of ways in the past year. No doubt I'm one of many, but I'd like to share my story to illustrate that the cutting of services or whatever else the state is doing to keep itself financially solvent is hurting real people.
Dan Walters had a funny column a few days back, excoriating anyone who use "numbers" and "projections" to theorize about the impacts of budget cuts. As if it's some kind of novel idea that an economy dominated by government spending would rise or fall based on the amount of that spending. Mr. Walters, 1937 called and wants a word with you.
Anyway, let's look at the heart of Walters' complaint. First he says that we must have a hefty budget reserve because the economy is likely to go south, and because it will signal to bankers that "we're solvent so they'll buy our short-term notes." As I noted earlier, this is nonsense given the clear Constitutional duty to repay debt before practically everything else. Then he says this:
Democrats and Republicans are equally guilty, meanwhile, of emitting self-important nonsense about the impacts of their actions on the state's recession-wracked economy. While Democrats claim that cutting "safety net" programs and/or public payrolls will worsen the recession by taking money out of circulation, Republicans claim that raising taxes will retard recovery by discouraging investment and/or consumer spending.
Both practice voodoo economics. The entire deficit on which they are working, $24.3 billion including Schwarzenegger's desired reserve, is well under 2 percent of the state's economy. The lesser cuts and taxes they are debating would merely shift relatively small amounts of money from one form of spending to another, all within the state's economy, so the macro economic impact would probably be nil, no matter what they do.
That's a strange opinion, especially because in the next sentence, he argued that a budget filled with gimmicks would threaten our economic future, even though such gimmickry would effect the same small amount of cash, from a macroeconomic perspective. But to his main point - cutting spending for state services, cutting jobs, cutting salaries for public employees and their related vendors, has a multiplier effect that in fact does weaken the prospects for economic recovery. You don't have to take my word for it. John Myers ran a story on this just today.
"It's hard to see how the country recovers if California does not," says U.S. Rep. Zoe Lofgren (D-San Jose). Lofgren says she thinks congressional authorization of loan guarantees for any state will happen. But no one thinks it'll happen in time for California, which needs to go to market -- assuming a budget deficit deal is agreed to in the state Capitol -- early next month.
Lofgren says she's particularly troubled that the national stimulus and recovery programs... which are expected to benefit California by as much as $80 billion... could be drained of their help by the cuts needed to balance the state budget. "It is contrary to the efforts that we're making," she says.
This is a fact neglected by Walters, the very real possibility that certain spending cuts would result in the forfeiture of stimulus funds as well as regular funding, multiplying the effect of the cuts. Many of the programs that Schwarzenegger wants to eliminate, like Healthy Families, CalWorks and Medi-Cal, have their funding matched by the federal government. Clearly any dollar cut there would mean $2 in practical cuts to Californians. And losing out on stimulus dollars could number in the tens of billions.
This UCLA Anderson Report also speaks to the impact of state spending on California and the nation at large.
According to UCLA Anderson Forecast senior economist Jerry Nickelsburg, there is nothing happening in California that will help pull the state out of recession in advance of the nation.
"California," Nickelsburg writes, "is in for a continued rough ride for the balance of 2009 and is not going to see economic growth return until the end of the year, shortly after the U.S. economy begins to grow."
The dire conditions surrounding the state budget will contribute to prolonging tough conditions in California, according to the report.
In his essay, Nickelsburg notes that Gov. Arnold Schwarzenegger is attempting to close the state's $24 billion budget gap with a combination of fee increases, forced borrowing from local government, the sale of state assets and, primarily, budget cuts.
Yet that the real risk for California, Nickelsburg writes, is the possibility that there will be no budget agreement at all and that the chaotic and inefficient spending cuts that would likely follow would have an even more severe impact on the ability of California to stem the downturn in economic activity this year.
The rhetoric has risen to the extent where a prolonged stalemate, like every year given our broken governmental structure, is possible. But clearly, Nickelsburg is demonstrating that state spending does have an impact on the economic picture at large, especially at a time when there's 11.5% unemployment and a growing dependence on state services.
That one of the top political reporters in the state would deny this economic reality is just baffling.
So there's a lot of conversation out there about car dealerships being told they won't be selling cars for Chrysler and GM any more.
The idea, we are told, is to save the auto manufacturers money by reducing the number of dealerships with whom they do business.
I don't really know that much about the car business; and I really didn't understand where these cost savings would come from, but I was able to have a conversation with the one person I do know who actually could offer some useful insight.
Follow along, Gentle Reader, and you'll get a bit of an education at a time when we all need to know a bit more about these companies we suddenly seem to own...and about the closure of thousands of local businesses that will make the news about our bad job market worse.
I put "trust fund" in quotes because it is currently about $1.6 billion in debt to the feds. Today the Republican Senate Caucus put a pretty nice little briefing report about the situation into email boxes around the state. You might think I'm kidding, but it's actually a pretty fair review of the facts. The analysis brings the partisanship into the mix, but what can you do, it's the Legislative Republicans we're talking about here.
There are three proposals out there right now. The first comes from the Governor. It would increase the maximum taxable wages from $7,000 to $10,500, increase the maximum tax rate from 6.2% to 8.1%, and decrease benefits a smidge. AB 1298 (Coto) raises those tax levels a bit, and SB 222 (Ducheny) opens up unemployment to some part time workers.
Unfortunately, if we do nothing, someday the feds will tell us we need to get our house in order. And with unemployment levels rising to as high as 14% in some models, that is going to be a big hole to fill. The Republicans want to spin this as a problem that can be evaded without increasing taxes, but that seems unlikely.
Just one more reason why 2010 must be the year we get 2/3 majorities.
California food stamp recipients will receive 13.6% more benefits thanks to the federal economic stimulus package, the state Department of Social Services announced Wednesday.
The increase, effective immediately, was included in the American Recovery and Reinvestment Act, approved by Congress and signed by President Obama in February.
John Wagner, the state social services director, said in a statement that the increase "will dramatically help families, while also boosting California's economy in ways that benefit grocers, food manufacturers and growers."
The average monthly food stamp benefit received by about 2.5 million Californians will increase from $300 to $341 per household. State food stamp rolls are expected to increase by 300,000 this year, officials said.
The federal stimulus package also provided $22 million in administrative funding for the state food stamp program, and 10 million pounds of food for food banks and pantries that serve low-income Californians through the federal Emergency Food Assistance Program.
Food stamp money is almost immediately spent. It's among the most effective forms of stimulus there is, with each dollar generating $1.73 in economic activity. Combined with the one-time $250 payment to anyone in the Social Security system, which is also very likely to get spent, these actions will provide a short-term boost to the economy, especially in California, which has an older population than other states.
Gloria Molina is trying to extend the benefit to those who have lost their jobs:
Earlier this week, in an effort to help unemployed middle-class workers who do not qualify for government aid, L.A. County Supervisor Gloria Molina proposed that the county pursue temporary state and federal waivers of eligibility requirements for cash aid, food stamps and housing benefits.
"As more and more people lose their jobs and search in vain for new ones in a shrinking job market, many families are finding themselves, often for the first time, with inadequate funds to pay their rent or mortgage, keep their utilities and provide food for their children," Molina said Tuesday, citing an article in The Times last week.
Molina noted that each month, food stamp applications are denied for more than 19,000 county residents, and 7,000 applicants are denied benefits under CalWorks, a welfare program for families.
The middle-class needs for aid have gone up dramatically in the state over the past six months. Particularly in our areas in Depression, the crisis is very wide and broad. Until the economy recovers, and as a means for it to recover, these actions at the federal level can at least cushion the blow.
