Brown Calls for Stimulus Funds to be Allocated to States Based on Unemployment, Foreclosure Rates

In Letter to Colleagues, Brown Makes the Case for Ohio; State Has Nation’s Tenth Highest Foreclosure Rate and Tenth Highest Unemployment Rate

WASHINGTON, D.C.—U.S. Senator Sherrod Brown (D-OH) today called on his colleagues to allocate economic recovery funds to states based on unemployment and foreclosure rates. In a letter to Senate leadership, Brown called for relief funds to be targeted to states like Ohio that have been disproportionately suffering from the economic downturn.

“Just as the recession has disproportionately affected certain industries, so too have certain states felt this downturn more acutely than others,” wrote Brown in a letter to Senator Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY). “In Ohio, this is evidenced by above-average unemployment and home foreclosure rates, swelling jobless rolls, increased reliance on the food stamp program, and a number of other economic indicators.  Unfortunately, these problems are not limited to our state.”  

Ohio is among the states hardest hit by the current recession. Since 2000, the state has lost more than 200,000 manufacturing jobs. The state’s unemployment rate of 7.3 percent is the tenth highest in the nation. Ohio’s foreclosure rate is the tenth highest in the nation, and significant water and sewer infrastructure needs—including $11.6 billion in documented clean water needs and $6.3 billion in unmet sewage upgrade costs.

In December, Brown sent a letter to President-elect Barack Obama advocating for specific priorities to be included in the final bill. The letter also was sent to Senate Majority Leader Harry Reid (D-NV) and House Speaker Nancy Pelosi (D-CA).

In the letter today, Brown outlined how stimulus funds could be most effectively allocated to alleviate the economic downturn.  The letter was also signed by Senator George V. Voinovich (R-OH).

“Factors like unemployment and foreclosure rates should be given great weight as stimulus funding is determined,” the letter continued. “The effects of the economic crisis have been uneven across the country.  To be effective, our nation’s economic stimulus strategy should reflect this reality.”

A full copy of the letter can be found below.


January 15, 2008


The Honorable Harry Reid                                                           The Honorable Mitch McConnell
Majority Leader                                                                                                   Republican Leader 
U.S. Senate                                                                                                                       U.S. Senate
Washington, DC 20510                                                                                 Washington, DC 20510


Dear Senators Reid and McConnell:

With the unemployment rate at a 16-year high, consumer spending on the decline, and a surge of benefit claims overwhelming social service agencies across the country, the need for an immediate economic recovery package becomes more urgent each day. 

We appreciate your commitment to crafting this legislation in a bipartisan manner.  Yet it is clear to us that just as the recession has disproportionately affected certain industries, so too have certain states felt this downturn more acutely than others.  In Ohio, this is evidenced by above-average unemployment and home foreclosure rates, swelling jobless rolls, increased reliance on the food stamp program, and a number of other economic indicators.  Unfortunately, these problems are not limited to our state.  

As the economic recovery proposal is developed, we urge that it be targeted to states disproportionately suffering from the economic downturn.  Factors like unemployment and foreclosure rates should be given great weight as stimulus funding is determined.  The effects of the economic crisis have been uneven across the country.  To be effective, our nation’s economic stimulus strategy should reflect this reality. 

Transportation funds, for example, are distributed without regard to economic distress.  As a result, states with the highest unemployment rates might receive only half the share of states with the lowest unemployment.  If the stimulus is intended to create jobs, it is necessary that unemployment rates higher than the national average are given appropriate consideration when distributing funds.

With the budget shortfalls experienced by many states across the United States, many essential services and programs handled at the state level are being cut.  Declining tax revenues are adversely affecting the state’s ability to provide necessary medical coverage to children, the poor, and the elderly, and it is crucial that the Federal Medical Assistance Percentage also be targeted to the states with the greatest need.  By factoring in home foreclosure and unemployment rates above the national average, we can ensure that states that need federal assistance the most receive it.       

The challenges confronting the 111th Congress and the American people are daunting, but by
making the right investments now we can overcome the economic challenges facing our nation.


Sincerely,

Sherrod Brown                                                George V. Voinovich
U.S. Senator                                                    U.S. Senator

###

Press Contact

(202) 224-3978