The Financial Bailout Fiasco

11/16/08

Michael Nutter mayor of Philadelphia said, cities need help just like financial institutions.
President-elect Barack Obama has called for some sort of aid to state and local governments so they don't have to layoff workers, but hasn't proposed a specific plan.

Requests for federal emergency funding are piling up, with the latest requests coming from cash-strapped cities seeking help to shore up budgets strained by sinking revenue, pension-plan losses and difficulty getting financing amid the credit crisis.

On Friday, the mayors of Philadelphia AtlantaPhoenixasked the Treasury Department to set aside $50 billion of the $700 billion Troubled Asset Relief Program to spur infrastructure investment to create jobs and lift local economies. The mayors also asked for loans to cover short-term borrowing needs and to meet payroll.

In a letter to Treasury Secretary Henry Paulson, the mayors warned that their dire fiscal situations would result in layoffs and tax increases that would place another drag on the economy as the country tries to climb out of a recession. The chances of getting TARP funding appear remote, however.

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