N.Y., S.C. governors differ on fix

WASHINGTON — Two governors offered Congress starkly different solutions Wednesday for the ailing economy, with New York's David Paterson seeking immediate aid from Congress, and South Carolina's Mark Sanford urging lawmakers not to throw more taxpayer money at the problem.

Paterson, testifying Wednesday before the House Ways and Means Committee, asked Congress to include aid for state budgets as part of any new economic stimulus package. Lawmakers are considering a stimulus package that could be voted on after the Nov. 4 election.

"Just like the financial services industry, we need a partner in the federal government in order to help stave off an impending financial calamity and stabilize our fiscal condition," said Paterson, a Democrat.

On Tuesday, Paterson said New York is facing a $47 billion deficit by 2012.

Twenty-nine states closed budget gaps totaling $48 billion for the 2009 budget year, and the projected shortfall for the following year is $100 billion, said Paterson.

Paterson is seeking higher Medicaid payments to states, greater unemployment benefits, infrastructure spending, and a boost in food stamp benefits to help state budgets.

Sanford, a Republican who was also appearing before the committee, contended they should not pass another stimulus package because it will not fix the economic problems but drive the country deeper into debt.

"I'm here to beg of you not to approve or advance the contemplated $150 billion stimulus package," Sanford said. "This $150 billion salve may in fact further infect our economy with unnecessary government influence and unintended fiscal consequences."

By Sanford's count, the federal government has already pumped $2 trillion into the economy this year through a previous stimulus package, the financial services bailout, and rescue actions for specific firms.

After Paterson and Sanford offered heady arguments featuring quotes from noted economists and novelist Ayn Rand, the committee heard from another witness, Mayor Douglas Palmer of Trenton, N.J.

He had a much simpler message, quoting "that great poet John Lennon of the Beatles."

"Help!" the mayor said.

The committee's senior Republican, Jim McCrery of Louisiana, warned his fellow lawmakers against embracing "all sorts of good-sounding spending increases" that may not pass a closely divided Senate or be signed by President Bush in the waning days of his administration.

Committee Chairman Charles Rangel, D-N.Y., said he hoped "leadership of both parties would be able to confer and come back after the election and see what we can do to provide assistance to local and state governments."

A separate hearing before the House Transportation and Infrastructure Committee demonstrated bipartisan support for tens of billions of dollars for infrastructure projects such as highway construction, water and sewer projects and modernization of schools and public housing.

There, lawmakers and witnesses such as New Jersey Gov. Jon Corzine, a Democrat, touted public works projects for both creating jobs and making the economy more efficient.

"Every billion dollars in spending on infrastructure, on highway and transportation expenditures does result in 35,000 new jobs," said Rep. John Mica, R-Fla.