SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
States struggling to assess budget damage from federal debt ceiling deal

Monday, Aug 1, 2011

* 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* Most of the stories regarding the deal’s impact on the states are now outdated because they were filled with pure speculation.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.

* Related…

* 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

- Posted by Rich Miller        


10 Comments
  1. - 47th Ward - Monday, Aug 1, 11 @ 3:57 pm:

    Welcome back Rich. I have to admit, I was searching for a CapFax methdone program for a while there and needless to say, I hope you had a great vacation. But never go away again.

    In recent years, I’ve become a huge fan of the Economist. They do a good job of analysing complicated issues without the partisan lens or dumbing it down for broad consumption. Here is their take on the debt ceiling deal and why liberals like me should step back from the ledge.

    http://www.economist.com/blogs/democracyinamerica/

    The Tea Party can claim credit if they want, but notice the graph where spending keeps rising. The Joint Committee is likely to recommend deeper cuts to Medicaid, which will hurt Illinois, but I was mostly concerned about the destimulative effect of lowered federal spending during this weak recovery. It appears my fear was overblown.

    For now at least. I don’t think anything in the debt ceiling deal was good for the country, especially the awful debate, but it wasn’t (and isn’t) as bad as I feared.


  2. - Rich Miller - Monday, Aug 1, 11 @ 4:05 pm:

    ===but it wasn’t (and isn’t) as bad as I feared. ===

    Ergo the problem with the entire media-driven “debate.”

    ===I hope you had a great vacation. But never go away again.===

    I did. And I almost extended it another week. Oh, well. I made up for it this morning by accidentally sleeping in.


  3. - Angry Chicagoan - Monday, Aug 1, 11 @ 5:10 pm:

    Given what’s held harmless and what isn’t mentioned, expect the big impacts to be in terms of infrastructure (especially transportation) and education spending. And on rural Medicare providers, unless they make a very focused effort to go after the real bloat with hospital construction and specialty providers in urban areas and also those states (mostly Southern) that have disproportionately high per-patient Medicare costs.

    Transportation policy has been a particular disaster of this administration. The only clear bright spot has been the high-speed rail grants, with some hopeful signs on car fuel economy as well. Highway reconstruction, transit, and biking/pedestrian use have been big losers — in large part because the administration has persistently resisted any responsibility for funding, despite Jim Oberstar’s best efforts in the last Congress.

    Tolls on all Illinois interstates? CIty property tax levies increased to pay for transit repair and rehab? More rural hospitals closed? I’d expect to see all the above — unless the federal government needs to get back to its historical norm of about 20 percent GDP in revenue (currently it’s less than 15 percent). The reason we’re not there now is Clinton’s 1997 tax cuts on unearned income, and Bush’s 2001 and 2003 tax cuts. Most of those will have to go in order to get back to 20 percent. And that has real consequences because those tax cuts mostly went to very rich people, while the user fees, property taxes and service closures will mostly impact the middle class.

    By the way, re 47th ward, it’s worth bearing in mind that the Economist is still pretty conservative; they’re just rational, that’s all. They’re very happy with the Cameron government’s austerity program in the UK and they’ve long favored “sound money” policies even when resulting spikes in currency values and interest rates priced British manufacturers out of foreign markets. Don’t confuse them with something a liberal Democrat or a politician from the manufacturing heartland would or should be happy with — rather think of them as Tories who would get on well with pre-1994, pre-Gingrich Republicans.


  4. - Plutocrat03 - Monday, Aug 1, 11 @ 5:22 pm:

    Actually, the Economist is mostly aligned with the euro-socialist monetary policies practiced on the continent. Conservatives they are not.

    The bottom line is still having govenment live within its means. The bolus of money for rail will be insufficient to finish the proposed project, so where is Illinois going to find the $$ to complete the work, get the rolling stock and operate the system?

    The expansion proposed by the toll authority is another example of governmental growth by demanding that all the users pay for expansion that will only benefit a small percentage of users.

    Chicago residents need to pay attention because the city’s bond indebtedness is way of the charts and if the State and Feds stop feeding excess cash into their system, there will be a real shock.


  5. - Yellow Dog Democrat - Monday, Aug 1, 11 @ 5:22 pm:

    As a Democrat, its very disappointing that no effort was made on the local level to trace the impact of closing federal tax loopholes.

    Because Illinois’ tax code is lashed to the federal tax code, closing federal loopholes would have been a boon to state and local budgets.


  6. - Angry Chicagoan - Monday, Aug 1, 11 @ 8:01 pm:

    Well, Plutocrat, if conservatism means holding up the government and the entire US financial system to get your way ideologically, I guess the Economist flunks the conservative test. If conservatism means cutting spending far deeper than even the Tea Party has contemplated, simplifying the tax code and lowering rates, then the Economist exemplifies conservatism. Although of course they wouldn’t call themselves that. They’d call themselves “liberal”, as in John Locke, or the German Free Democrats, or Milton Friedman, or Hayek — in other words, classical liberals, not the left liberals that characterize the term here in the USA.

    You’re absolutely correct on the long-term impracticalities of rail funding, the lack of morals in toll expansion, and the city’s high bond indebtedness, but unfortunately wrong again on the big picture which is that the implication of “government living within its means” is rendered somewhat moot by the fact that its means of federal revenue has been chopped 20 percent below the long-term average by the Bush tax cuts. A majority of the current federal deficit crisis is therefore a revenue problem, and the remaining part is mostly the cost of wars and stimulus, with the longer-term problems on the spending side arising almost entirely from Medicare providers such as hospitals, specialist doctors and drug companies. Discretionary domestic spending has already been cut by half in the past two decades in inflation-adjusted dollars; in actual dollars it is the same as 2001 and set to drop. What we have now from the federal government compared to the 1970s or 1980s is skeletal. And that has big consequences for the states and cities and their residents because federal support they used to rely on has disappeared.


  7. - wordslinger - Monday, Aug 1, 11 @ 9:40 pm:

    The Economist is not conservative? The word has lost all meaning in some circles. Barry Goldwater and William F. Buckley were conservatives. Joe Walsh and Rush Limbaugh are not.

    How’d you like to be John Boehner? He’s got the toughest job in show business trying to run that juvenile crowd. Under the circumstances, I think he’s done pretty well. McConnell stepped up, too.

    What recklessness by these Tea Partiers. I was glad to see McCain regained his voice and called them out.


  8. - Plutocrat03 - Monday, Aug 1, 11 @ 10:29 pm:

    The other way to look at is to consider that the liberal wing is seemingly desperate to continue spending vastly beyond the country’s means on nebulous programs with no prospect of paying back the indebtedness.

    Flower boxes, upper-crust residential districts and luxury parks won’t save the city, but the TIFF debt can sink it.

    I don’t get it. Are you advocating spending more money than the government takes in forever?


  9. - Wumpus - Tuesday, Aug 2, 11 @ 8:50 am:

    Oh no, government “worked”.


  10. - wishbone - Wednesday, Aug 3, 11 @ 12:49 am:

    Spending tax dollars raised at another level of government whether municipalities spending state money or states spending Federal money is a major source of our fiscal woes at all levels. Other than to provide some minimal level of services to the poorest states and municipalities the practice should end.


Sorry, comments for this post are now closed.


* Unions file suit in St. Clair County
* Reader comments closed for the holiday weekend
* AG Madigan files TRO
* In re James Dimas
* Question of the day
* Weirdest. Oppo Dump. Ever.
* Big bucks reported by Zopp, Raja
* LIVE Comptroller Munger press conference coverage
* Yet another clock starts ticking down
* Hey, Cardinal fans...
* Rauner makes cheery visit to Illinois State Museum
* The Tier 2 difference
* *** UPDATED x4 *** Attorney General goes to court
* Credit Unions – Protecting Financial Futures
* GOP legislator wants "temporary, balanced budget"
* Food for thought
* The blame game
* Meanwhile, in the real world...
* When Indiana invaded Illinois
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............

...............


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

          
        * Apple Maps vs. Google Maps (Video)
        * Android Community Weekly Digest: Jul. 5, 2015
        * First Few Days with the Oppo R7
        * Our 5 best new Windows Phone apps of the week
        * Curved screens versus flat
        * Motorola Droid Turbo experiences battery issues after Lollipop update
        * [Deal] Flipkart slashes INR 9,000 off the price of the Nexus 6

        * Sony’s Upcoming 4K Network Camera
        * Browse The Web And More With Toshiba’s New 11.6-Inch Laptop
        * Use this trick to boost your phone speaker's volume
        * Ulefone’s Latest 4G LTE-Enabled Android 5.1 Smartphone With 3GB RAM
        * Fred Wilson: The Next Reddit Will Likely Be Built on the Bitcoin Blockchain
        * Facebook Messenger Experiment Lets You Share GIFs Easily
        * Nintendo NX Won’t Be As Powerful As The PS4 [Rumor]

        * Sale heads list of potential Sox ASG reserves
        * White Sox steal another HR from Davis
        * Errors derail White Sox winning streak
        * Orioles 9, White Sox 1: Ugly all over; winning streak over
        * Errors derail White Sox winning streak
        * Sale seeks history against former mentor Buehrle
        * White Sox winning fair share of close games

        ...............


        Main Menu
        Home
        Illinois
        YouTube
        Pundit rankings
        Obama
        Subscriber Content
        Durbin
        Burris
        Blagojevich Trial
        Advertising
        Updated Posts
        Polls

        Archives
        July 2015
        June 2015
        May 2015
        April 2015
        March 2015
        February 2015
        January 2015
        December 2014
        November 2014
        October 2014
        September 2014
        August 2014
        July 2014
        June 2014
        May 2014
        April 2014
        March 2014
        February 2014
        January 2014
        December 2013
        November 2013
        October 2013
        September 2013
        August 2013
        July 2013
        June 2013
        May 2013
        April 2013
        March 2013
        February 2013
        January 2013
        December 2012
        November 2012
        October 2012
        September 2012
        August 2012
        July 2012
        June 2012
        May 2012
        April 2012
        March 2012
        February 2012
        January 2012
        December 2011
        November 2011
        October 2011
        September 2011
        August 2011
        July 2011
        June 2011
        May 2011
        April 2011
        March 2011
        February 2011
        January 2011
        December 2010
        November 2010
        October 2010
        September 2010
        August 2010
        July 2010
        June 2010
        May 2010
        April 2010
        March 2010
        February 2010
        January 2010
        December 2009
        November 2009
        October 2009
        September 2009
        August 2009
        July 2009
        June 2009
        May 2009
        April 2009
        March 2009
        February 2009
        January 2009
        December 2008
        November 2008
        October 2008
        September 2008
        August 2008
        July 2008
        June 2008
        May 2008
        April 2008
        March 2008
        February 2008
        January 2008
        December 2007
        November 2007
        October 2007
        September 2007
        August 2007
        July 2007
        June 2007
        May 2007
        April 2007
        March 2007
        February 2007
        January 2007
        December 2006
        November 2006
        October 2006
        September 2006
        August 2006
        July 2006
        June 2006
        May 2006
        April 2006
        March 2006
        February 2006
        January 2006
        December 2005
        April 2005
        March 2005
        February 2005
        January 2005
        December 2004
        November 2004
        October 2004

        Blog*Spot Archives
        November 2005
        October 2005
        September 2005
        August 2005
        July 2005
        June 2005
        May 2005

        Syndication

        RSS Feed 2.0
        Comments RSS 2.0
        WordPress

        Loading


        * Addressing the fiscal mess in Chicago - Quad-Ci.....
        * Closer Look: Despite Illinois state budget dead.....
        * Illinois Lawmakers Still Negotiating Budget - WIFR..
        * Several Illinois programs could halt if no budg.....
        * Closer Look: Despite budget deadlock, there are.....
        * Bruce Rauner skilled in making Dems scapegoats .....
        * Despite budget deadlock, there are ways out - T.....


        * Boy, 7, killed during violent July 4 celebrations in Chicago
        * Bison thrive on the Illinois prairie; 14 calves born
        * Quincy man charged in shooting that killed 1, wounded 1
        * Danville childhood home of Dick Van Dyke on condemned list
        * Traders recall the 'rush' and 'roar' as famed pits close
        * Closer Look: Despite budget deadlock, there are ways out
        * Dead shows set attendance records at Chicago's Soldier Field
        * 7-year-old boy shot, killed in Chicago over Fourth of July
        * Woman who tries to sneak on planes arrested twice in 2 days
        * East St. Louis paid big legal fees to state senator's firm

        * Despite state budget deadlock, there are ways out
        * Despite budget deadlock, there are ways out
        * Statehouse Insider: Take the over on when this impasse is going to end
        * Springfield School District has paid nearly $500K in pension penalties in past 6 years
        * East St. Louis paid big legal fees to state senator's firm
        * Illinois Senate honors victims of Charleston church shootings
        * Bill would allow cameras in Illinois nursing homes
        * State employee lawsuit seeks assurance of full pay despite no budget
        * U of I freezes administration hiring over budget
        * Attorney General Lisa Madigan seeks court ruling on state payments during budget impasse

        * Toni Preckwinkle's monster
        * Why Caterpillar is letting its geek flag fly
        * How much could Chicago pension payments jack up your property tax bill? Try 30 percent
        * Who's to blame for the summer of governmental meltdown?
        * Can Rauner pit Cullerton against Madigan against Emanuel?


          * Fans revel in U.S. women's soccer team's 'unbelievable' victory
          * Design student revamps cardboard signs to help Chicago's homeless stand out
          * Police boss McCarthy on child's death: 'This has got to stop.'
          * Two men killed in Gresham after shots fired at SUV
          * Woman known as 'serial stowaway' arrested again
          * 3 killed, 27 wounded over eight hours in Chicago, including boy, 7
          * Dad said he rushed dying son, 7, to hospital: 'You cool, I know you cool'
          * Man killed in hit-and-run in Lawndale
          * Inside a weekend crime scene: 'Somebody walked up with a mask on'
          * Three children among four hurt in Elgin fireworks incident


          * Coping while black: A season of traumatic news takes a psychological toll
          * Rauner proposal would advance $450M to help Chicago schools
          * Emails show Emanuel, top officials aware of Clinton's private address
          * After pension payment, Chicago Public Schools to make $200M in cuts
          * CPS, Emanuel warn of deep cuts, layoffs to school district
          * The legacy of Willie Dixon on his 100th birthday
          * Preckwinkle may reevaluate sales tax plan if Springfield acts on pensions
          * At eleventh hour, CPS makes huge pension payment
          * Southwest Side residents work toward racial healing
          * As budget deadline approaches, Illinois faces a government shutdown


          * Fullerton, Konar and Reif: Pope Francis' message a chance for Illinois to plan ethically for climate change
          * Despite state budget deadlock, there are ways out
          * Bernard Schoenburg: Independent redistricting proposal could be on 2016 ballot
          * Statehouse Insider: Take the over on when this impasse is going to end
          * Statehouse Insider: Take the over on when this impasse is going to end
          * Springfield School District has paid nearly $500K in pension penalties in past 6 years
          * Letter: Rauner being set up for a fall
          * Angie Muhs: A year later, optimistic and grateful
          * East St. Louis paid big legal fees to state senator's firm
          * Illinois Senate honors victims of Charleston church shootings


          * Dean Troutman returns home after his 700-mile trek
          * Urbana man arrested following home invasion
          * Peoria teen Emily Coffey will take diabetes cause to Capitol Hill
          * Volunteer opportunities for the week of July 5
          * Causes for Concern for Week of July 5
          * 2015 Champaign County Freedom Celebration fireworks show
          * Best of teams: No. 35, South Carolina
          * Daily Digest 7/5/15
          * Daily Digest: Ceremony to honor forest anniversary
          * Best of teams: No. 36, North Carolina State


          * Ramos homers, drives in 2 as Nationals defeat Giants 3-1
          * Stevenson grad Brunson named MVP in U19 title game
          * Lloyd hat trick leads US over Japan 5-2 for World Cup title
          * Shoe factory collapses in eastern China, killing 13 people
          * Fans cheer as Princess Charlotte christened on royal estate

          * House lawmakers overcome hurdle on key tra...
          * Rodney Davis talks funding with Bloomingto...
          * The agency that fought Illiana gets a new ...
          * Rep. Dold takes educational cruise down Ch...
          * Lawmakers decry high turnover rate of VA h...
          * CBD Oil, and politics
          * Simon considering state Senate bid
          * Killer Congressman Tom MacArthur trying to...
          * Shutdown? State may not notice
          * Rep. Bob Dold

          * Durbin on Overtime Rules - Alton Daily News...

          * Thousands Line Route For Arlington Heights......

          * Carli Lloyd-3; Japan-2
          * I’m betting the NEA RA will say, “No racist flags in schools or public spaces.”
          * NEA RA: It is frequently an out-of-body experience.
          * US Women's Soccer Final Shown At Crew
          * CPS pension bill paid for with the the lives of teachers and students. In debt by design.
          * I will be talking about Confederate flags direct from the NEA RA on WBAI radio Monday morning.
          * Supreme’s agree to hear fair share case. Public employee unions in jeopardy.
          * Why my NBI was more than about the Confederate flag. 
          * Rev. William J. Barber: “The Confederate war flag belongs in a museum — not over or on our state house or on state-issued license plates. It is a symbol of terror, hatred and treason to America’s ideal.”
          * Story can help you and your buyers avoid financial roadblocks


          * State, Teamsters Reach Tentative Agreement - Workers at IDOT, DHS, IDES, and CMS in Cook County to Vote on New Contract
          * Governor Rauner Extends Tax Filing and Payment Deadlines for Businesses and Individuals Impacted by Recent Tornado - Deadlines Pushed to December 31, 2015
          * Illinois EPA Releases Annual Report on Landfill Capacity
          * IDNR Urges Public to Leave Fireworks Displays to Those Who Are Licensed and Trained - Fireworks Show Sponsors Reminded to Check Credentials of Fireworks Vendors
          * Governor Receives Initial Criminal Justice Commission Report




              Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller