Debt Ceiling Fix Could Mean Problems For States

[Purveyor]

(07-31) 11:02 PDT Hartford, Conn. (AP) --

The cost of the compromise needed to raise the federal debt ceiling will likely inflict more fiscal pain on states still struggling to recover from the recession and the end of federal stimulus spending.

While the details of the spending cuts to states remain unclear, lawmakers from both parties have discussed the need to cut or impose caps on so-called discretionary spending over the next decade.

That could mean wide-ranging cuts in federal aid to states, affecting everything from the Head Start school readiness program, Meals on Wheels and worker-training initiatives to funding for transit agencies and education grants that serve disabled children.

There also is concern among governors, state lawmakers and state agency heads that Congress will make deep reductions or changes in federal aid for health services for the needy, most notably through Medicaid. That could shift more of the costs onto states that already are having trouble balancing their budgets.

MORE...

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2011/07/31/national/a104811D97.DTL

[Earth_First]

1. Why don't they just come right out and say it:

Why hide it behind "could affect the states...."?!

[blkmusclmachine]

2. It's what DC's aiming for.

n/t

[kas125]

3. It can't get much worse. I just came from a meeting with a group

of friends. One of those friends lost her job two years ago and couldn't find another. Since then, she's gotten sick and just qualified for disability and Medicaid. She told me today that Medicaid is useless unless it's for a hospitalization because her MONTHLY deductible is $834.