Mobile Menu - OpenMobile Menu - Closed

Chairman Yarmuth Opening Statement at Budget Hearing on How Federal Investments Impact State & Local Governments

Jan 15, 2020

Washington, D.C.— Kentucky Congressman John Yarmuth, Chairman of the House Budget Committee, gave the following opening statement at today’s hearing on the importance of federal investments in state and local communities. Remarks as prepared are below:

Welcome back everyone. I am looking forward to this new year in the House Budget Committee, and I hope you are as well.

Last year, with the support of both Republican and Democratic members of this Committee, Congress put in place bipartisan budgets for 2020 and 2021, complete with discretionary toplines and committee allocations, including accommodations for initiatives that are fully offset. The Committee held hearings addressing some of the biggest economic issues facing our nation, including the benefits of immigration reform, the cost of climate change and aging infrastructure, the potential costs of debt, the federal government's vital role in mitigating economic downturns, and more.

The federal budget has a direct impact on Americans' everyday lives, but it also affects the abilities of state and local governments to operate and serve their constituents. State and local governments touch the lives of nearly every American. In many cases, they have been on the forefront of major policy innovation. But the reality is, many of these great advancements – like Medicaid expansion, infrastructure revitalization, and investments in our public schools – would not be possible without critical support from the federal government. From public parks to public libraries, renewing a driver's license or driving kids to school, every day, millions of Americans interact with institutions and infrastructure made possible with the help of federal investments. 

The impact of federal funding across the country cannot be overstated. On average, federal funding makes up nearly one-third of a state's budget. As a result, federal funding decisions, unpredictability, and, of course, national economic downturns have a major impact on states, their budgeting, and their plans for strategic investments. The same is true for local governments. With many state legislatures and city councils headed into session to plan for the upcoming fiscal year, it's an important time to examine the role of federal investments in our communities.

Most federal grant dollars going to states are for Medicaid, which provides insurance coverage to 65 million Americans and allows states to customize their programs to meet the specific needs of their population. Under the Affordable Care Act, 37 states, including D.C., have expanded Medicaid, helping vulnerable Americans gain affordable and quality health care coverage. And now Kansas is on deck to potentially become the 38th. In my home state of Kentucky, nearly a half a million people obtained health coverage through Medicaid expansion. That's in a state of just over 4 million. I wish the people of Kansas similar success.

Federal support also keeps the doors open at many community health centers and public health clinics, helping those struggling with addiction and others trying to break free from violent or abusive situations.

Other federal investments that Americans rely on every day include programs that help Americans meet their basic needs, transportation projects to construct highways, transit systems, and airports, and other infrastructure investments that can revitalize communities and encourage economic growth.

Meanwhile, education grants, such as Title I, are making sure our schools are equipped to serve our nation's youth. With the help of federal grants, localities can support their most impoverished schools and ensure students with disabilities get a full education. Using these investments, local officials can tailor programs to best meet the unique needs of their communities.

These are vital programs. And while it may be easy for some of our colleagues or others in the White House to look at a dollar amount in a column on a page of the federal budget and say, "yes, slash it" – it is important to remember that cuts carry serious consequences for states and localities and the people we all serve.  Most states and local governments operate on the thinnest of margins and would be unable to backfill any major loss of federal funding.  Their budgets would take a massive hit, but it’s the people, our constituents, who would suffer most.

During economic downturns, the loss of federal support would be especially harmful. In a recession, states face a one-two punch of declining tax revenues and increasing demand for services. Federal investments help states – most of which are required to balance their budgets – to avoid painful cuts and still provide crucial services. Between 2008 and 2012, the American Recovery and Reinvestment Act and a later extension were responsible for closing 24 percent of state budget gaps as states nationwide grappled with the lingering effects of the Great Recession. 

Today, the Committee will hear from witnesses who know first-hand just how important federal investments are to state and local budgets. I look forward to discussing with our witnesses – and my colleagues – ideas that will help the federal government be an even better and more reliable partner to state and local governments and the Americans they serve.

# # #