Portions of President Barack Obama's $447 billion jobs package are really designed to bail out weak finances in Democratic states, a new study finds.The plan seeks funds for infrastructure, education and other projects that states should fund but cannot.
Many blue states have run up state debts, as nationwide, state debt is running around $3 trillion — tack on another trillion or even more if unfunded pension liabilities are factored in.
"These vast contributions to the coffers of state and local governments, though pitched as a jobs bill, are in reality the latest in a series of bailouts for debt-ridden state and local governments," Paul E. Peterson and Daniel Nadler, both Harvard academics, write in a Wall Street Journal opinion piece.
President Barack Obama
(Getty Images photo)"They are of special benefit to states in the blue regions of the country where the president's most fervent supporters reside."
A Harvard Program on Education Policy and Governance study finds states with legislatures that are heavily Democratic and have a highly unionized public-sector work force must pay interest rates that are often an extra half a percentage point higher than those in red states.
"In short, the bond market has concluded that the more unionized the state and the bluer its political coloring, the riskier it is to hold bonds marketed by that state," Peterson and Nadler write.
Republicans, meanwhile, say they will work with the president on the jobs bill.
"While we have a different vision for what is needed to support job creation in our country, we appreciate the president's pledge to transmit legislation to Congress and will immediately request that it be scored by the Congressional Budget Office," says House Speaker John Boehner, according to Fox News.
Interesting.
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