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Closer Look Changes Critic’s Mind on State Fiscal Assistance

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The day President Obama signed an extension of assistance to states to preserve jobs in education and health care — August 10 — Mississippi Governor Haley Barbour said that accepting the money would make his state worse off, since Mississippi would have to take up to $75 million in state funds away from law enforcement, mental health, and other needs to qualify for the federal funds.

The Wall Street Journal used Barbour’s view to buttress an editorial arguing that the President and Congress “are determined to keep pushing strung-out state governments to take one more fix.”

But yesterday, Governor Barbour issued a statement saying that Mississippi will, in fact, take the money, having realized that the state wouldn’t have to shift state funds to qualify after all.

It’s telling that one of the new law’s harshest critics, who at first accused the federal government of “hijacking state budgets,” has reconsidered his position on accepting the funds in light of the facts.

The funding is an extension of aid Congress originally provided in last year’s Recovery Act.  It will protect a fragile economy by helping avert more layoffs of teachers, health care workers, and others that would send a new wave of job losses throughout the economy and damage prospects for recovery.  As the nonpartisan Mississippi Economic Policy Center noted, “the legislation represents an important boost for the state’s economy and its people in these difficult times.”

The Recovery Act has helped prevent a terrible economic situation from being even worse.  This month’s extension recognized that the state aid was going to run out before states — which have been hit by a record drop in revenues plus an increased need for services — got back on their feet.  Because of these Recovery Act measures, more people are working; that’s the most important fact of all.