Marshall Auerback had a post today on huffpo(huffpo pic doesn’t do him justice) that was crossposted from New Deal2.0

In the article he makes the point of how revenue sharing with the States is needed,necessary, AND that Nixon liked it and implemented it.

“The most immediate crisis, deserving attention before any other, is in the states and cities. Yet assistance to the states is being cut off at a time likely to forestall economic recovery. State and local budgets should not be cut. But how to prevent this? Here’s an idea: By recreating a revenue sharing program for the states, with a pass-through to cities, on a scale sufficient to plug the budget gaps. How much is needed? As James Galbraith has noted, the federal government’s fiscal aid to the states has hitherto only offset the job cuts imposed by falling revenues and balanced budget requirements. He therefore suggests a number of practical measures to enhance this revenue sharing:

Federalizing Medicaid may be the most effective and practical way to achieve this. The alternative is open-ended general revenue sharing: on the condition that states neither raise nor lower their tax rates, the federal government should supply the funds required to close their budget gaps and to maintain public services at baseline levels, for the duration of the crisis.

President Obama could well point out that revenue sharing has Republican lineage; it ought to be a bipartisan cause today. It was Richard Nixon who first introduced the concept. Nixon viewed the federal bureaucracy as a poor revenue manager and argued that much counter-cyclical spending should go to the states, as they are closer to people’s needs and more directly hurt by falling revenues. (Now doesn’t that sound familiar !!) But instead of simply cutting taxes, as later conservatives would, he proposed a new system called revenue sharing, which redirected funds to states and municipalities. The federal government would collect taxes and local governments would spend the money. Passed after contentious debate, the State and Local Assistance Act of 1972 initially delivered $4 billion per year in matching funds to states and municipalities. The program, which distributed some $83 billion dollars before it was killed by Ronald Reagan in 1986, proved enormously popular.”

In the article he indicates that it was good ‘ol Ronnie Raygun who killed the program. So I started wondering why Reagan would do something like that given such was initiated under a Republican president and was consistent with conservative values associated with “State’s Rights”.

Went searching and found this:
“There is simply no justification for the federal government, which is running a deficit, to be borrowing money to be spent by state and local governments–some of which are now running surpluses,” Reagan said in his opening remarks.”

“The President said “tough calls” must be made to cut back on federal programs but he stood fast against their appeals to make the Pentagon shoulder a greater share of the budget-cutting burden.”

“Gov. James R. Thompson (R-Ill.) said Reagan had a heated exchange with New York Gov. Mario M. Cuomo, a Democrat. Thompson said Cuomo asked Reagan for a tough stand on defense cuts and to support a freeze in cost-of-living benefits for Social Security–two positions the governors’ executive committee has adopted.”

So here it is 26 YEARS LATER and the same old swill is being pushed down the taxpayers/citizens throats.

Make me want to holler, make me want to scream.

http://www.youtube.com/watch?v=_f3wiU7VTAU&feature=related