Recovery Plan Making Huge Difference for Economy and Working Families

Opponents of the federal recovery bill are now already rushing to declare the plan a failure, despite most economists believing that any stimulus was always expected to take time to reverse an economic crisis driven by years of unregulated financial excess and of misguided D.C. fiscal policies.  As a Wall Street Journal report detailed, a survey of 51 economists found that that "53% of respondents said [the recovery plan] has provided somewhat of a boost but that the larger effect is still to come."

Debunking Attacks on Stimulus:  But what is clear is that the recovery plan has already helped the economy avoid an even larger catastrophic tailspin by helping states avoid mass layoffs and allowing them to plan for job creation programs that will bear fruit over the next year.  The Center on Budget and Policy Priorities (CBPP) outlines in Correcting Five Myths About the Stimulus Bill why the critics of the stimulus are ignoring reality and just trying to score political points:

• Economist Mark Zandi of Moody’s Economy.com has estimated that without the stimulus plan "real GDP would have declined nearly 6% in the second quarter" rather than the 3% decline that is now estimated happened.  Paul Krugman goes further and argues that without the stimulus plan, "we would have had a full Great Depression experience...Deficits, in other words, saved the world."
• From the beginning, it was recognized that stimulus money would be spent over two to three years to help sustain long-term economic recovery.  Because economics predict a longer recesssion than normal, Congressional Budget Office head Douglas Elmendorf stated the goal of extended support for the economy; "a fiscal stimulus that ends before the economy has started to regain its footing runs the risk of exacerbating economic weakness when the stimulus ends.”
• $140 billion for states in support of Medicaid and education sharply reduced the $350 billion budget shortfall states are facing in the next two years, allowing them to avoid laying off teachers, nurses and public safety staff in ways that would only increase unemployment across the country. 

As the Government Accountability Office highlighted in a just released report, states, beyond filling existing budget gaps with stimulus stabilization funds, are required to give priority to projects that can be completed within 3 years and are pursuing projects such as road maintenance and repairs that can deliver job boosts as quickly as possible.

Providing Relief for States and Working Families:  Federal aid, in fact, arrived just in time for states to close 30-40% of state budget shortfalls, according to this report by CBPP.  The report highlights state-by-state the crucial state programs employing people across the country saved from the budget axe because of the recovery plan.

Other reports highlight how the stimulus plan has helped revive summer youth job programs across the country, offsetting massive youth unemployment in the private sector, allowed community colleges to continue providing crucial retraining programs for laid-off workers, expanded weatherization assistance programs to help low-income families reduce energy bills, and provided billions in food support through the food stamps program for those in immediate need.

There are reasonable concerns that economic equity and tracking of the funds would be improved by greater transparency in what states and especially private contractors are doing with the funds.  And given that the economic downturn is far worse than was projected when the recovery plan was first designed, quite a few economists are now arguing for another stimulus.

But none of those broader concerns detract from the critical importance of February's recovery plan for states and working families during the present economic crisis.

Low-Income Voters Added to the Voting Rolls through Improved NVRA Implementation

Perhaps the most impressive recent success story in expanding political participation has been the dramatic turnaround in public agency voter registrations in some states.  With the prodding of Demos, Project Vote, and others under the umbrella of the NVRA Project, several states have reinvigorated compliance with this federal law that requires that certain state agencies offer voter registration to the individuals they serve.  The most well known agencies are motor vehicle departments, but public assistance agencies are also included and it is them that can have the most impact on bringing low-income and marginalized citizens into the political process.

When states have decided to prioritize compliance with the federal law, improvements have been startling.  The most recent success story, according to a new NVRA Project report, is Missouri.  Less than a year ago the state was registering less than 8000 voters a year at its public assistance agencies, since it was ordered to fully comply with the federal law registrations have reached 100,000 in eight months.  This kind of change has happened in other states like North Carolina on a voluntary basis when advocates approached them.  In Missouri it took legal action.

After a strong success in Missouri, Demos, Project Vote and other partners are pursuing a legal remedy over the lack of compliance of two other states - Indiana and New Mexico.  Since the laws requirements are clear, it is only a matter of time before these states are fulfilling their duties to register their most vulnerable and powerless citizens.  Of course, legal action is only pursued when states refuse to comply.  Colorado, California, and New Jersey have also been notified that they are not in compliance, and hopefully they will look at the track record of success and choose to join that movement instead of dragging their feet.