New Study Shows Path to Economic Recovery for States

For the second year in a row, South Carolina’s economic outlook ranked 20th nationally, according to a new report from the American Legislative Exchange Council (ALEC). The second edition of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index offers a roadmap for economic recovery based on state policies that have a proven impact on growth.

A poor tort liability system and high workers’ compensation costs hurt South Carolina’s economic outlook. Also of particular concern is the state’s rapid accumulation of debt, which ranks 4th worst nationally. On the positive side, the study gives good marks to South Carolina for its recently legislated tax changes and its status as a “right to work” state. Among bordering states, North Carolina’s economic outlook was fairly comparable, with a rank of 21st, while Georgia ranked 8th best nationally.

The report shows how federal stimulus dollars may simply encourage out-of-control state spending, which is up 124 percent over the last 10 years, without requiring states to make the tough decisions needed to bring about financial stability. "States were quick to increase spending and add programs during the good times," said South Carolina State Senator Danny Verdin, a member of ALEC's Tax and Fiscal Policy Task Force. "Now we need to make tough choices to live within our means. The best solution to our budget woes is to control state spending and promote policies that foster economic growth and job creation."

Co-author and renowned economist Dr. Arthur B. Laffer summarized the report's findings when he said, “States cannot tax their way into prosperity.” Rich States, Poor States presents rankings of the 50 states based on the relationship between policies and performance – revealing which states are best positioned to make a recovery, and which are not.

Laffer and his co-authors, Steve Moore, senior economics writer at The Wall Street Journal, and Jonathan Williams, director of the Tax and Fiscal Policy Task Force for ALEC, analyze how economic competitiveness drives income, population and job growth in the states. They found that, “states with a high and rising tax burden are more likely to suffer through economic decline, while those with lower and falling tax burdens are more likely to enjoy robust economic growth.”

“The top performing states keep taxes, spending, and regulatory burdens low, while the biggest losers in the book tend to share similar policies of high tax rates, unsustainable spending and regulation,” said co-author, Jonathan Williams. “State governments that believe they can bring about economic recovery by growing government and increasing taxes are sadly mistaken.”

TOP FIVE STATES BOTTOM FIVE STATES
1. Utah 46. New Jersey
2. Colorado 47. Maine
3. Arizona 48. Rhode Island
4. Virginia 49. Vermont
5. South Dakota 50. New York

To read more about the state-to-state comparisons, see the individual state analysis, and view the full report, download it for free at www.alec.org.

American Recovery and Reinvestment Act

Here's the link to all the information about the Stimulus Package. http://thomas.loc.gov/cgi-bin/bdquery/z?d111:H.R.1:

Pres. Obama Asks for Support

Americans need to know how the American Recovery and Reinvestment Act will affect their lives -- they need to know that help is on the way and that this administration is investing in economic growth and stability.

Governor Tim Kaine has agreed to record a video outlining the recovery plan and answering questions about what it means for your community. You can submit your questions online and then invite your friends, family, and neighbors to watch the video with you at an Economic Recovery House Meeting.

Join thousands of people across the country by hosting or attending an Economic Recovery House Meeting this weekend.

The stakes are too high to allow partisan politics to get in the way.

That's why I've consulted with Republicans as well as Democrats to put together a plan that will address the crisis we face. I've also taken steps to ensure an unprecedented level of transparency and accountability. Once it's passed, you will be able to see how every penny in this plan is being spent.

You can help restore confidence in our economy by making sure your friends, family, and neighbors understand how the recovery plan will impact your community.

Sign up to host or attend an Economic Recovery House Meeting and submit your question for the video now.

Our ability to come together as a nation in difficult times has never been more important.
I know I can rely on your spirit and resolve as we lead our country to recovery.

Thank you,
President Barack Obama

P.S. -- If you can't host or attend an Economic Recovery House Meeting, you can still submit your questions for Governor Kaine and then share the video with your friends and family this weekend. Learn more here

This Week in Congress

What U.S. Congress is expected to cover this week. More links and ifo here.

Economic Recovery The House of Representatives this week will debate a measure that sets parameters for distributing of the remaining $350 billion in funding from October’s Emergency Economic Stabilization Act.

Health Care The House will consider a bill reauthorizing the State Children’s Health Insurance Program, or SCHIP. The reauthorization will expand the program to cover an additional 4 million eligible children; the cost will likely be fully offset primarily by raising the federal tobacco tax.

Equal Pay The Senate will consider the Lilly Ledbetter Fair Pay Act and possibly the Paycheck Fairness Act at the end of this week after both bills passed through the House last week. The Ledbetter bill corrects a 2007 ruling by the Supreme Court that made it harder for victims of pay discrimination to bring a suit under Title VII of the Civil Rights Act. The Paycheck Fairness Act builds on this act by prohibiting employers from limiting workers’ ability to share salary information or retaliating against them for seeking that information.

Energy and Environment The Senate will continue debate on S. 22 this week after a successful cloture vote on Sunday; the package contains over 150 individual bills designating public lands and wilderness areas. A vote on final passage of the bill is expected on Thursday or Friday.