U.S. Governors seek $1trillion assistence from federal government

This amount, equal to 3 – 3.5% of the economy, to aid the country’s 50 states to help pay for education, welfare and infrastructure as states struggle with steep budget deficits amid a deepening recession.

Gov. David Paterson of New York said 43 states now have budget deficits totaling some $100 billion as tax revenues plunge.

The latest package calls for $350 billion to create jobs by building or repairing roads, bridges and other public works; $250 billion to maintain education; and another $250 billion in “counter-cyclical” spending such as extending unemployment benefits and food stamps, which are typically a responsibility of the states.

The remainder would be used to fund middle-class tax cuts, stimulate the embattled housing market, and stem the tide of home foreclosures through a loan-modification program.

“The Obama team has been very receptive in listening to us,” said Gov. Jim Doyle of Wisconsin. He said “quite a number” of other governors back the initiative.

The Republican Governors Association, however, said the level of federal aid being sought would create a burden for the future.

Paterson of New York said his state’s budget deficit has surged to $15.4 billion currently from $5 billion in April 2008, despite a 3.2 percent cut in the education budget.

Corzine said the money called for represents about 3 percent to 3.5 percent of the economy.

In light of the $700 billion provided to bail out the financial industry, “It’s not shockingly large,” he said.

http://www.reuters.com/article/newsOne/idUSTRE5014F120090102