Legislation to Help States Offers a Model for Re-ordering Budget Priorities

Blog Post
Tuesday, August 10, 2010

Returning briefly from its summer recess, the House of Representatives today approved a bill that would spend $26 billion to ease state budgetary woes. The Senate passed the measure last week. This money would be used to prevent budget cuts and layoffs, with $10 billion designated for education. According to the Congressional Budget Office (CBO), such state aid is a relatively effective way to support the economy. It is notable that the new spending in the bill was offset with revenue increases and cuts in other spending, so that it would not add to the deficit. This will likely be the model for policymakers attempting to continue economic relief.Concord applauds that effort. Moving money from lower priority items -- either spending or tax loopholes -- to higher priority items is the definition of budgeting. For economic relief, the test should be whether non-partisan economists like those at the CBO suggest we can get a good bang for the buck. Then we should shift money from the policies that don’t meet those tests to ones that do.