Democrats in Washington thought they had crafted a fiscally responsible state aid bill, one that gives state governments $26 billion to prevent teacher layoffs and Medicaid cuts. (In Illinois alone, the Medicaid provision would plug a $750 million hole.) When the Congressional Budget Office ran the numbers, though, it found that party leaders would need to identify an additional $4.9 billion in offsets to keep the bill deficit-neutral. And because Republicans will filibuster anything (except tax breaks to the wealthy) that adds even .01 percent to the federal deficit, it's back to the drawing board for Senate Majority Leader Harry Reid (D-NV).
This is a frustrating development for a number of reasons. While Illinois' tax system has created a structural deficit at home, Federal Reserve Chairman Ben Bernake admits that the budget holes engulfing most state governments were caused primarily by the national recession, which sucked up revenues and drained rainy day funds. Instead of continuing to lend a hand during this painful recovery, Senate Republicans are forcing states to cut back spending on education and health care, which will have a detrimental effect on the state's overall economy.