Federal boost to North Carolina’s economic recovery needed
House members will likely vote on a jobs bill this Thursday that will boost the slow economic recovery by ensuring consumers can maintain their spending in local communities and by providing states with much-needed fiscal relief. Such legislation is needed because job growth and productivity continue to lag. If we continue at this pace, it will be years before the deficits in jobs and productivity created in this recession are made up. In addition, as North Carolina’s budget debate begins in earnest, economists have made clear that significant cuts will not only undermine the recovery but represent a significant drag on the economy for years to come.
The temporary measures in the jobs bill that will be considered on Thursday provide a targeted solution to the issues– continued high unemployment rates, low levels of job creation and a state fiscal crisis– facing the country and North Carolina.
1) By renewing the provisions that provide extra weeks of unemployment insurance (UI) and subsidized COBRA health insurance coverage for unemployed workers to the end of the year, more than 200,000 North Carolina workers who are currently unemployed will be able to continue to purchase goods and services in their local communities;
2) By providing additional fiscal assistance to states struggling to balance their budgets, specifically through the Federal Medical Assistance Percentage which is already included in Senate budget proposals, the state will be in a better position to preserve existing jobs in public health and education.
3) Finally, by extending the TANF emergency fund provision, there is an opportunity to efficiently create jobs for low-income unemployed workers. More than 120,000 jobs were estimated to be created in 28 states through the existing provision in the American Recovery and Reinvestment Act of 2009.
Nationally, economists estimate that state budget cuts alone could cost the economy 900,000 jobs. We can’t afford more job losses and the resulting threat to consumer spending. As it stands now, North Carolina faces a 429,787 deficit in the number of jobs available to a growing workforce. And the Governor’s budget represents a potential loss of an estimated 600 (direct) to more than 5,000 (indirect) jobs on top of existing job cuts made just last year.
An additional investment is needed to keep our economic recovery on track and these temporary measures will not add significantly to the long-term deficit. The Center on Budget and Policy Priorities released a report today detailing the basic economic principles that support action on this bill for even those policymakers who are fiscally concerned. The fact is that a quicker recovery whose benefits extend to workers, business and government is more likely to improve the state and nation’s fiscal outlook.
All members of North Carolina’s federal delegation should support these measures. Such a boost will go a long way to keeping our economic recovery on track.