Maine and America continue to hemorrhage jobs even as the economy begins to pick up steam. We must put this jobs deficit at the very forefront of our national priorities. We must build upon the success of the 2009 American Recovery and Reinvestment Act (ARRA) with swift congressional passage of new legislation to create hundreds of thousands more new jobs. The House passed a bill in December and Senate action is required immediately.
The 2009 Recovery Act created an estimated 750,000 jobs and slowed our nation’s economic decline. It also provided vital relief to states facing severe revenue shortfalls. The $1.2 billion Maine received has helped to maintain investments in education and workforce development, provide services to the elderly and disabled, assist those who have lost their job during the recession and retain or create as many as 10,000 Maine jobs.
The jobs bill pending in the U.S. Senate is an important first step to strengthen the economic security of Mainers hardest hit by this recession. However, as proposed, it fails to provide additional fiscal relief for states and enhanced Medicaid reimbursements. Without them, the Maine Legislature, struggling to balance the budget, may be forced to make policy decisions that undermine the benefits of this legislation.
The proposed state supplemental budget purports to close the staggering $438 million budget shortfall through cuts alone. Maine workers, particularly those involved with education and health care, will lose jobs. The Maine Center for Economic Policy’s analysis indicates that this approach will result in 7,000 to 10,000 Mainers losing their jobs as the effects spill over into other areas of our economy and affected families hunker down and spend less.
Imagine the threat of losing every Hannaford Brothers job in Maine or twice the number of jobs that L.L. Bean supports in Maine. Losing the same number of jobs would result from the proposed budget cuts in Maine. Without additional aid to states, this picture will repeat itself to a greater or lesser extent in almost every state. Indeed, the Center on Budget and Policy Priorities estimates that the total combined budget shortfall for all states in 2011 is $180 billion. The actions that states will have to take to close their budget gaps could cost the economy another 900,000 jobs.
Confronted with such a dire picture state and federal policymakers must consider all options for addressing this issue. Over the next 2-3 years the jobs and budget picture in Maine and across the United States will continue to worsen. At the state level, we must continue to improve efficiencies as the Legislature has over the last several budget cycles. However, cuts alone will not close the significant gaps that we face, certainly not in a way that best positions Maine for recovery and renewed prosperity.
At the federal level, we must pass a jobs bill that includes additional aid to states. Combined, these actions will give Maine workers the best chance to weather the recession and put Maine on the path toward future economic growth.
