Conservative Governors Plan To Worsen Economy

[irishbobcat]

Conservative Governors Plan To Worsen Economy
CBPP's Judy Solomon warns states dangers of slashing health care services: "...at the same time that these governors claim they can't afford to maintain their Medicaid and CHIP programs in the face of large budget shortfalls, many of them are proposing big tax cuts. Such tax cuts have a far lower 'bang for the buck' in promoting economic growth and creating jobs in a weak economy than the Medicaid spending that would be cut ... In addition, when a state cuts its Medicaid spending, it also loses money from the federal government because Washington pays an average of 57 percent of each state's Medicaid costs. So, every dollar in state Medicaid cuts would mean an average total reduction of $2.33."

New report indicates state proposals to cut corporate taxes won't grow economy. Wonk Room's Pat Garofalo: "... a new paper from Peter Fisher ... of the Iowa Policy Project, shows that these sorts of breaks yield very little in terms of real savings for companies ... 'The tax breaks to corporations do not stimulate consumer spending, and it is not clear how retailers can collect more sales tax if consumers are not spending any more money' ..."