Democracy Soup

Making sense out of the world of politics

GOP fights against stimulus, yet Red States get way more federal money than Blue States

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Originally published on on Mon, 02/09/2009 – 3:30pm

There is a lot of money at stake in the “Main Street Job Creation Act” to improve the financial status of states: Money to help states pay their bills, plus projects to improve a state’s infrastructure.

With a few exceptions on both sides of the aisle, Democrats are in favor of a domestic stimulus package and Republicans are against this idea.

There has even been the idea that senators from states who aren’t interested in the stimulus package shouldn’t receive the money.

But that is where things get interesting. Turns out that the states that voted for John McCain in 2008 by and large get way more money in federal outlays than they pay in taxes.

The Tax Foundation broke down the fiscal 2005 numbers and ranked the states based on federal outlays vs. how much tax money was sent to Washington.

While New Mexico, a blue state in 2008, ranked first, the states that finished 2-9 are all states that voted for John McCain: Mississippi, Alaska, Louisiana, West Virginia, North Dakota, Alabama, South Dakota, and Kentucky.

By contrast, the bottom 10 states (in order from 41-50) — Colorado, New York, California, Delaware, Illinois, Minnesota, New Hampshire, Connecticut, Nevada, and New Jersey — all voted for Barack Obama. In fact, all but one of the states that pays more tax than receive in outlays — Texas (35) — voted for Obama.

Virginia (10) and Maryland (18) do get more money due to significant federal employment. But the only other blue states in the top 20 were Hawai’i (12) and Maine (13). The red states rounding off the top 20 were Montana (11), Arkansas (14), Oklahoma (15), South Carolina (16), Missouri (17), Tennessee (19), and Idaho (20).

The Tax Foundation points out that the numbers aren’t perfect since money may go to a company in a state, and then later, some of that money goes to another state. But the contrast is so daunting that clearly there is a discrepancy.

No wonder that Republicans are happy with the status quo. Southern “red” states make up 5 states in the top 10 and half of the top 20. Given that McCain won 22 states, 15 of those states finished in the top 20.

The states that voted for Barack Obama clearly have been neglected when it comes to federal funds vs. taxes sent to Washington. This stimulus package can do a lot toward making those numbers a bit more balanced. And the ones who are already getting the money are standing in the way.


Written by democracysoup

February 9, 2009 at 3:30 pm

Posted in Uncategorized

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