Orszag responds to Senator Graham State Fiscal Stabilization Funds in the ARRA.

FOR IMMEDIATE RELEASE
April 2, 2009

OMB Director Responds to Senator Graham

Washington, DC — White House Office of Management and Budget Director Peter Orszag responded to U.S. Senator Lindsey Graham, R-S.C., addressing the Senator’s questions about State Fiscal Stabilization Funds in the American Recovery and Reinvestment Act.

To view the letter from Director Orszag, follow this link. Click here.

Here is an excerpt:

You have inquired about whether the South Carolina State legislature may seek State Fiscal Stabilization Fund monies if the Governor does not, given the “significant ambiguities” in the ARRA and in how Section 1607 impacts Title XIV, in particular. You attached to your letter an analysis by the Congressional Research Service, which concluded, among other things, that under Title XIV, unlike other provisions of the Recovery Act, legislative action pursuant to Section 1607( b) would not suffice for a State to accept Stabilization Fund monies absent the Governor submitting the required application for Stabilization Fund monies under Section 14005 of the Recovery Act.

Administration lawyers have considered the various statutory provisions at issue and, based on their advice, we have determined that Section 1607(b) does allow the State legislature to make available to a State Recovery Act funds in a number of areas in the event that the Governor does not certify acceptance of Recovery Act funds. For example, States can access Medicaid funding, certain education funding (made available in Title VIII of the Recovery Act), and much transportation, health, infrastructure, and energy funding, among other areas, if the State legislature certifies – in lieu of the Governor’s certification – that the State will accept funds pursuant to Section 1607.