Paterson in D.C. looking for funds

WASHINGTON — Gov. David A. Paterson said Wednesday he is looking for New York's fair share of federal dollars — not a government handout — as he asks Congress to boost the state's economy with funding for highway and transit projects.

"We've been one of the great lenders" to the federal government, Mr. Paterson told the House Ways and Means Committee, citing the annual gap between what New York contributes in taxes and what it receives in federal programs.

Mr. Paterson joined other state officials from around the country at a hearing on how states are responding to the financial crisis and the possibility of another economic stimulus measure from Congress this year. Mr. Paterson said he favors hundreds of billions of dollars in public projects to boost employment and soften the blow of the economic downturn, although that view is not shared by all the nation's governors.

In recalling the federal funding gap, Mr. Paterson hit a recurring theme — but this time in the sense of helping rescue the state from a deep recession.

The gap between New York's contribution and its funding for federal programs grew from $61.2 billion in 2006 to $89.6 billion last year, Mr. Paterson said. For the past decade, he said, the state's shortfall is equal to the $700 billion-plus cost of the federal bailout of the financial services industry.

"I'm here to say New York needs help back," Mr. Paterson said.

Democratic leaders in Congress have promised to seek an economic stimulus of perhaps $150 billion, or perhaps more, after Election Day. The White House has softened its firm opposition in recent weeks but details such as the total cost and how the money would be divided remain to be seen.

The Democratic plan would also increase unemployment benefits; Mr. Paterson urged such an increase as well as more spending on the food stamps program. The Economic Policy Institute reported last week that food stamps alone generate $1.73 in economic benefit for every $1 spent by the government, the most of any measure being considered by Congress.

The House Republican leadership proposed a stimulus package Tuesday that relies more heavily on tax cuts and credits and increases domestic energy production, including offshore drilling.

The governor's appearance came a day after he announced that New York's budget deficit will reach $12.5 billion in 2009-10. He has said he will ask the state Legislature to return to session this year to deal with the crisis, including looking for $2 billion in additional budget cuts — but no cuts, he said, in funds approved earlier this year to help upstate New York.

With $410 million in additional funding from Washington, Mr. Paterson said, "we could put people to work on over 40 highway, transit and rail projects that are shovel-ready."

But the funding must be free from the usual requirement that states match federal funds with money of their own, Mr. Paterson said.

Mr. Paterson brushed off headlines that suggest he came to Washington hat in hand for money, noting that the Bush administration initially proposed a $700 billion bailout for lending institutions with few controls and no restructuring of the banks, an approach Congress eventually rejected.

"They're the ones who really came to Washington with their hats in hand," Mr. Paterson said.