GREENBERG: This free money isn't

• Article
• Comments ()
• Click-2-Listen
• Videos

By Paul Greenberg

COMMENTARY:

Hey,it's free money! Isn't that what they always say - they being state and local officials, and the money being federal grants?

We, as in We the People, aren't supposed to notice the strings attached to federal funds, or the unintended consequences that may result from taking them.

Maybe every federal grant should come with a warning label: Taking this money could have deleterious effects on your fiscal health.

Consider the offer of increased federal funding for states that agree to expand their unemployment benefits. A state can't lose on a deal like that, right?

Wrong. Because the states would have to increase their benefits permanently; the stimulus package lasts only two years.

Those states that take the money might also have to provide benefits for a lot of folks who now don't qualify for them.

Tennessee's Gov. Phil Bredesen noticed the catch. "We are evaluating this piece of money," he says, "whether it makes sense for us to take it."

Tennessee is having problems raising enough money to pay the unemployment benefits it offers even now. What'll it do if it has to provide more?

To quote Mr. Bredesen, "We're in the position of going back to our legislature this year for changes in our tax structure just to keep our fund whole, and taking it to a new level may be too much of a lift for the legislature this spring."