WHY STATES ARE SHUNNING AKA's "STIMULUS" MONEY

By Lynn Stuter

February 24, 2009
NewsWithViews.com

Louisiana Governor Bobby Jindal has gone on record, stating his state will not be taking stimulus money that will force expansion of existing programs or the establishing of new programs. Joined by Governors Mark Sandord of South Carolina, Haley Barbour of Mississippi, Sarah Palin of Alaska, Butch Otter of Idaho, Mitch Daniels of Indiana, and Rick Perry of Texas, these governors are voicing concerns about the stimulus money being offered the states by the federal government under H.R. 1, better known as the Porkulus Package or the Piggy Package of Pork Barrel Spending.

In my last article, I stated that the total cost of the Porkulus Package would be $4.06 trillion broken down as follows: $789 billion for the Porkulus loan itself, money that would have to come from the already depressed economy; approximately $744 billion in debt service on that loan and $2.527 trillion in new programs and expansion of existing programs over the next decade.

It becomes apparent that the states are being offered stimulus money with strings attached; that the cost of getting that money is acceptance of federal regulation.

This phenomenon is nothing new; it has been going on, literally, for decades.

It is called federal discretionary grants.

This is how it works.

Congress writes and passes a law; money is appropriated to meet the monetary requirement of the law.

Requests for proposals (RFP) are published. RFPs delineate the terms and conditions the state, county, municipality, or school district (grantee) must meet in order to receive grant money. Prospective recipients write their grant applications to meet the terms and conditions of the RFP. The grant application must then be signed by an individual with the authority to do so, then is submitted to the federal agency administering the grant.

If the grant is accepted by the federal granting authority, grant monies are then awarded, establishing between the grantee and the federal government a de facto contract, legally binding, in which the grantee agrees to the terms and conditions set down by the RFP, including compliance with any laws stated in the RFP.

More often than not, one of the conditions of the RFP governing the grant, is that the grantee agree to fund the balance of the project or program and provide continued funding for the same.

What recipients of these grants have learned is that the federal grant money amounts to pennies on the dollar of the total cost of the grant project or program; that the grants really only represent “seed moneyâ€