A direct connection between the "American Recovery and Reinvestment Plan" and daily life in Berkeley, Calif.:
On Tuesday, the superintendent of the Berkeley Unified School District sent out a letter to the Berkeley High School "etree" warning that imminent state budget cuts in California threatened to make a proposed reorganization of the school designed to improve "educational outcomes" for students "difficult, if not impossible, to implement."
On Wednesday, the Wall Street Journal reported that a new version of the economic recovery plan, cooked up by House Democrats, would allocate $80 billion to an "education stabilization fund," to "be used to help states avoid cutbacks in teachers and classroom programs."
All together, state and local governments would get about $167 billion from the House version of the economic recovery plan. (Another $87 billion would supplement state Medicaid programs.)
Economists who support a fiscal stimulus generally agree: aid to local and state governments is critical. California is currently facing an $11.2 billion shortfall. State governments do not have the option of deficit spending -- when revenue plummets, spending must fall, or taxes must go up. And in California, raising taxes is fiendishly difficult, the legacy of 1978's infamous Proposition 13.
The tragic aspect of all this is that California's schools were already woefully underfunded. Any help from the federal government amounts to little more than a band-aid on already gangrenous limb. Sure, the money will help prevent California and other states from making other cuts, such as laying off state workers or cutting back on state infrastructure spending, both of which would be serious drags on the economy. But it's still hard to see the educational stabilization fund, much as I am rooting for its quick passage and implementation, as anything other than a holding action.