Paterson, testifying before House committee, says government must pass an economic stimulus package to provide financial relief to states

By Juliann Vachon

As New York faces mounting budget shortfalls and a national financial crisis, Gov. David A. Paterson called on Congress yesterday for immediate aid, saying the federal government should help states cope with widespread economic turmoil.

Testifying before the House Ways and Means Committee, Paterson urged Congress to urgently pass an economic stimulus package that pours fiscal relief directly into New York.

Paterson’s testimony came a day after he announced the state faces a $47-billion budget gap over the next four years – the largest in New York’s history. State legislators have already started making spending cuts, but Paterson said federal help is still needed to reverse budget shortfalls.

“We are cutting all we can and we will cut all that we are able to, but inevitably, the deficit is too voluminous for us to address,” Paterson said. “We feel that targeted, sensible action by the federal government could provide relief for us now.”

Democrats in Congress are considering a second stimulus package – but one more focused on government spending designed to create jobs and not on one-time tax rebate checks. President George W. Bush has been cool to the idea, so Democrats may have to wait until next year, and hope they’ll have Barack Obama in the White House to support the plan.

Another governor, Republican Mark Sanford of South Carolina, disagreed with Paterson at the hearing and pleaded with Congress to avoid another stimulus package.

“If we simply add more money at this time and in essence bail out what are in some cases unsustainable programs, I think that we end up with real problems down the road,” Sanford said.

But Paterson said New York deserves federal help because it “has been shortchanged for years when it comes to aid from Washington.” In 2007, the state sent $86.9 billion more in taxes to the federal government than it got back.

Speaking to committee chairman Rep. Charles Rangel (D-Harlem) and other members, Paterson ran through a list of initiatives needing federal aid, such as repairing infrastructure, boosting the food stamp program, extending emergency unemployment benefits and putting a moratorium on federal regulations that harm state budgets.

Paterson, in his written testimony, also blamed the federal government for allowing financial institutions to go unregulated to the point of near-collapse.

“States didn’t cause this crisis and we shouldn’t be left to deal with it alone,” he said. “A rescue package from the federal government will help soften the blow for average Americans.”