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Associated Press/Photo by Al Grillo

The Buzz

Need-to-know news

Issue: "The schools that Arne built," April 11, 2009

Big dig

Gov. Sarah Palin of Alaska joined a handful of Republican governors refusing to accept millions in federal funds slated for their states under the president's $787 billion economic stimulus package. Palin rejected $288 million of the $930 million headed to Alaska, saying stimulus-funded programs could leave the state footing the bill when federal dollars run out. At least three other GOP governors made similar moves: Rick Perry of Texas, Haley Barbour of Mississippi, and Bob Riley of Alabama. Gov. Bobby Jindal of Louisiana made headlines in February as the first GOP governor to suggest he would reject some stimulus funds, but he may be reconsidering: The governor's workforce commissioner said the U.S. Labor Department has allayed some concerns about strings attached to the federal dollars.

Most GOP governors are still accepting the funds for their states, with one exception: Gov. Mark Sanford of South Carolina said he would refuse nearly all the money. The governor asked the Obama administration for permission to use the stimulus funds to pay down the state's debt. White House officials refused the request, and Sanford said he would reject about $700 million, standing his ground against intense criticism by state lawmakers from both parties: "When you're in a hole, the first order of business is to stop digging."

Cutting ties

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The Orange County board of super-visors last month canceled a Planned Parenthood community health education contract, putting a $300,000 dent in the California group's wallet. Since abortion is the group's major profit center, supervisors said, it is not likely to offer unbiased education. Planned Parenthood objected, saying the money was not used to fund or promote abortions. But Orange County board chairman John Moorlach disagreed: "[W]hen you contact a law firm that specializes in bankruptcies, they most likely will advise you to file for bankruptcy," Moorlach wrote in the email to constituents prior to the board's vote. "If you go to Planned Parenthood, they are most likely to recommend their specialized surgical solution, which they provide and are compensated for, which appears to be a conflict of interest."

The vote follows similar moves elsewhere. The Corpus Christi city council in Texas voted last November to cut Planned Parenthood's $30,000 share of state and federal grants targeting children through eight programs. After halving it in 2008, Sarasota, Fla., officials in October nixed completely a $12,500 annual allocation for Planned Parenthood of Southwest and Central Florida in 2009. "With the bad economic turn, a lot of these agencies are looking at their books more closely," said Tom McClusky, senior vice president of Family Research Council Action. "Maybe they're realizing that subsidizing an agency like Planned Parenthood isn't the best use of government funds."

Debt to grow on

The Congressional Budget Office poured some cold water on President Obama's budget plans last week, predicting that the Obama budget would create $9.3 trillion in deficits over the next 10 years. That number is $2.3 trillion more than the White House had predicted, and a headache for the administration. At his March 24 prime time press conference, Obama sought to cast his spending surge as "what lays the foundation for a secure and lasting prosperity," but apparently even Democrats on Capitol Hill aren't buying that. A dozen Senate Democrats reportedly sent a letter to Senate Budget Committee chairman Kent Conrad, D-N.D., saying that "the deficits projected by CBO are simply not acceptable."

Buyer's market

After several weeks of uncertainty, Treasury Secretary Timothy Geithner on March 23 unveiled his plan to relieve banks of bad assets and unclog credit markets. The goal of the plan is to persuade investors to buy up to $1 trillion in bad home loans and mortgage-backed securities that have been plauging banks' balance sheets. To do that, the government would lend buyers 85 percent of the purchase price of these "toxic assets." If the prices then rise, investors will reap the benefit. If the prices instead fall, taxpayers would take most of the loss.

Investors seemed relieved to have a plan in place, as the Dow gained almost 500 points on March 23. But skeptical economists take issue with Geithner's assumption that the bad assets are underpriced and the risk to taxpayers is thus minimal. "For [Fed Chairman Ben] Bernanke and Geithner, there are no bad assets. Only misunderstood assets," said economist Tim Duy.

Epidemic

Washington, D.C., released numbers last month showing that 3 percent of the population in the nation's capital is infected with HIV/AIDS, triple the percentage that constitutes an epidemic and higher than infection rates in parts of Africa (like Burkino Faso) and eastern Europe (like Ukraine). The rate is twice that of New York City, another nucleus of the domestic AIDS crisis, and five times the rate of Detroit.

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