* One benefit of my vacation was avoiding DC’s debt ceiling nonsense. But now that Congress and the President appear to have struck a deal, my main concern is how this will impact Illinois. There isn’t much out there about the impact on states at the moment. I received this statement from Gov. Pat Quinn’s budget office, which hopes to have more later today or tonight…
We are pleased our leaders in Washington have reached a compromise as to avoid any disruption of government activities. We continue to closely monitor and prepare for the final results and are working with agencies to evaluate the potential outcomes that could affect job creation, Medicaid and our infrastructure.
Yeah. Not much.
* Most of the stories regarding the deal’s impact on the states are now outdated because they were filled with pure speculation. The deal itself was finally released to the public today and you can read the full text by clicking here.
* There are hints, but the actual cuts apparently won’t be known for some time. From Bloomberg…
States received about 35 percent of the $1.62 trillion spent during the 2010 budget year from the federal government, according to the National Association of State Budget Officers. The money is used for programs such as Medicaid, public works projects, and public schools. The debt-ceiling agreement requires Congress to cut $2.4 trillion from the federal deficit, including more than $900 billion in the next decade. […]
The debt-ceiling agreement doesn’t spell out how cuts are to be made, and much of that decision-making is left to a bipartisan congressional panel.
* CNN breaks it down…
Outlays for discretionary programs, which include defense spending, would be cut by $741 billion.
On top of that, $156 billion would be saved because of reduced interest costs on the country’s debt. And $20 billion would be cut from education loan initiatives and by curtailing waste, fraud and abuse in other mandatory programs.
In terms of education spending, the bill would increase funding for Pell Grants by $17 billion between 2012 and 2015. It would also cut student loan funding by $22 billion over 10 years.
The spending caps in the bill would result in $21 billion in savings in the first year, and grow annually from there. By 2021, outlays would be reduced by $112 billion.
States get money from those “discretionary programs,” but, again, there are no details as of yet. States did get one spot of good news, assuming this thing passes…
Moody’s Investors Service said last month it was reviewing the top credit ratings of municipal borrowers, including the states of Maryland, Tennessee and South Carolina, because of the tussle over the federal government’s finances.
Michael Bird, who tracks federal affairs for the National Conference of State Legislatures, said that may be averted should the compromise pass.
* Lack of pay for regional superintendents threatens start of school
* Illinois 50 out of 50 in 2010 for state deficit
* Metra: Capital fund in worse shape than operating fund
* Trading Hostages: Why Lobbyists Are a Key Part of the Debt-Limit Deal
* The Four Big Problems With — And Four Silver Linings Around — The Debt Limit Deal
* Debt Ceiling Deal—Less Than Meets the Eye
* The Fine Print on the Debt Deal
* Treasurer: Illinois investment funds remain safe
* Rutherford readies
for debt-ceiling crisis
* As protests brew, Walsh still has Republican support