NEW YORK (Reuters) - Neither New York City nor the state can count on a bailout from the U.S. government because it is only salvaging industries “that have a cascading impact through our economy,” Mayor Michael Bloomberg said on Monday.
New York City gets 12 percent of its tax revenues from Wall Street, and could lose 48,000 jobs by next October, including likely layoffs in the related fields of banking, real estate and insurance, the state comptroller estimated on Monday.
“They can’t bail out everybody, nor should they,” Bloomberg told reporters during a news conference, when asked about Citigroup’s weekend rescue. “It isn’t that they are too big to fail, but that they are too important to fail,” he said, adding some industries that do not meet that criterion could be spurned.
The prediction by Bloomberg, a former Republican turned independent, might disappoint other state and local officials, from Detroit Mayor Ken Cockrel, Jr. to New York Gov. David Paterson. The two Democrats, along with other politicians, last week tried to persuade Congress to loosen its purse strings.
Also on Monday, Democratic County Executive Thomas Suozzi, whose county lies just east of New York City and is one of the nation’s richest, faulted Barack Obama’s plan to spend $60 billion over 10 years on roads, bridges and mass transit.
Though he said this initiative should be pursued, Suozzi said the plan’s flaws include its taking too long, funding of unneeded projects, and unfair treatment of some states.
Suozzi, who helped Nassau county recover from a spending spree when it was under Republican leadership, also called on the new Democratic president to start paying for the entire cost of Medicaid over the next three years.
The federal government now splits the cost of this health plan for the poor, elderly and disabled, with the states. Suozzi said his plan would fulfill Obama’s promise of a national health plan.
“The benefit to each state would be proportional to its Medicaid expenditures, resulting in all states being treated equally and fairly,” said Suozzi.
New York state spends 52 percent of its $121 billion budget on healthcare and education, and Suozzi said his plan would clip about $8 billion off next year’s $12.5 billion deficit.
Suozzi estimated the federal government would have to spend an extra $50 billion each year, adding states should be barred from modifying their current plans though they could offer Medicaid to people who lose their jobs or pay for the insurance they buy from their former employers.
Reporting by Joan Gralla; Editing by Diane Craf