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States sweat cuts in Senate stimulus

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Steve Chiotakis: President Obama’s stimulus package is back in the Senate awaiting more debate and a formal vote. Among the groups sweating out the details are states. They are hoping to get their share of some much-needed cash. From North Carolina Public Radio, here’s Marketplace’s Janet Babin.


Janet Babin: The House bill sets aside some federal money that states could use however they want. Another slice of it would be designated for education.

But the Senate’s version would reduce funds for states by $40 billion. Higher education budgets would likely be the first line item cut.

Washington Governor Chris Gregorie says that’s where states need the most help:

Chris Gregorie: We have got to come out with this recession ready to go with a skilled work force, so I hope it will in conference be replenished.

Unlike the federal government, 49 of the 50 states have balanced budget requirements.

Michael Bird with the National Conference of State Legislatures says that means they usually can’t write checks during a recession:

Michael Bird: We lay people off, we delay projects, we slice programs, we do all the things that that are against economic recovery.

That’s why states are watching this stimulus debate so closely.

I’m Janet Babin for Marketplace.

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