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Coalition says Main Street needs a bailout, too

Seven hundred billion. That’s the amount of taxpayer dollars Congress is considering as part of its bailout package to keep the country’s financial system from complete implosion.

Fifty billion. That’s the dollar amount being bandied about as part of an economic recovery package for millions of Americans suffering from unemployment, foreclosure and high food and gas prices.

“This is about priorities and about scale,” says Patrick Lester, of the Alliance for Children and Families, based in Washington, D.C. “The administration has been asking for a free hand for the Wall Street bailout, and we’re asking for pennies on the dollar by comparison to help out ordinary people on Main Street.”

Lester’s organization is part of Save Our States, a loose national coalition of social service groups and labor unions that is focusing on states that are facing or expecting budget deficit.

The group today talked with members of the Minnesota media about their efforts to get Congress to bail out Main Street, too, with a $50 billion package that would go toward extending unemployment benefits and investing more in Medicaid, heating assistance, and infrastructure.

So far, the group has focused its message on about a dozen states, including Minnesota, Ohio, New York and Pennsylvania. The coalition got active in May after the Bear Stearns $40 billion bailout, organizers say, when they saw that the amount given to the investment firm would be sufficient to help states struggling to fund such services as Medicaid and unemployment payments.

Here’s the rationale for the Main Street help the coalition wants to see enacted by Congress:

Invest in infrastructure
Coalition member Todd Pufahl of the Laborers District Council of Minnesota and North Dakota, says workers in the building trades are experiencing unemployment at more than three times Minnesota’s current 6.2 percent unemployment rate. He says nearly 8,000 construction jobs were lost over the past year in Minnesota. He says federal money for infrastructure and transportation would go a long way to spur economic growth and create jobs.

“For every $1 billion of federal spending in transportation and infrastructure, at least 35,000 good-paying, family-supporting jobs are created,” says Pufahl.

Coalition members say Minnesota’s record-high unemployment rate and rising fuel and food prices mean more of Minnesota’s middle-class families are looking to food shelves for help.

Increase the food stamp allowance
Jill Heibert of Hunger Solutions Minnesota says there’s been a 62 percent increase in food shelf use since 2001 in the state. She says any economic package for Main Street should include an increase in the food stamp allowance. Although the recent farm bill addressed food stamps, it cannot keep up with current 7.5 percent food inflation that has taken many people by surprise, she says.

The Save Our States coalition says it’s also critical that Congress approve more federal money to support heating assistance for fixed- and low-income residents and to  increase Medicaid spending.

Add money for Medicaid
Mark McAfee of AFSCME Council 5, a union representing workers who deliver services through Medicaid (including hospitals, child protection services, and nursing homes), calls increased funding for Medicaid a “moral imperative.”

“The health of more than one in four of Minnesota children is protected through Medicaid coverage,” McAfee says. “Without assistance from the federal government, we risk hurting Minnesota families at a time when they need our assistance the most.”

McAfee points to 2003, when Congress passed a stimulus package to states that pumped $195 million into Minnesota to support its Medicaid program, called Medical Assistance. McAfee says the additional money helped with rising Medicaid costs and prevented cuts to services.

“The stimulus worked then, and it can help our state now,” McAfee says.

Extend unemployment benefits
The Save Our States coalition also wants an extension in unemployment benefits beyond the 13-week extension authorized by Congress this summer.

Coalition member Frank Ostronski, of Aitkin, Minn., says his benefits will run out in two weeks, and he’s running out of cash to pay his mortgage. Last December, he lost his job in sales and has been collecting unemployment ever since. The 68-year old says he’s having a hard time finding a new job in the surrounding area, which is typically not rich in job opportunities anyway, but also has been hit hard by the economic downturn. Ostronski says he draws a small Social Security check each month, but it’s not enough for him and his wife to live on.

“We may not shout as loud as Wall Street, but we’re in trouble, and we need Congress to help us by extending unemployment benefits, “says Ostronski. “It’s frustrating to see Congress bailing out everybody else, but forgetting about us, the American citizens.”

Now, as the congressional clock ticks toward recess until after the elections, coalition members plan to meet with congressional delegations to push for their stimulus package.

Marisa Helms is a former award-winning metro-area reporter for Minnesota Public Radio.

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