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* Most of the stories regarding the deal’s impact on the states are now outdated because they were filled with pure speculation.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


* Bost: "minimum wage will actually hurt the middle class"
* S&P revises Illinois outlook to "negative"
* Let's try that NRI document dump again
* What's ahead?
* Question of the day
* Teh crazy
* Lawyers want expedited pension ruling
* Briefing schedule, threats issued
* A look at another aspect of the Rauner proposal: Property taxes
* Quinn opens new front in campaign: Assault weapons
* Cross turns thumbs down on Rauner service tax
* Define "regularly"
* Internal Maywood politics caused shift in NRI grant money
* *** UPDATED x1 *** Rate Rauner's new TV ad
* 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

          
        * Marvel offering 1st month promo to read over 15,000 comics
        * iPhone sales up, iPad sales down, Google Play Material Design & more – Pocketnow Daily
        * Google Maps update lets you search less, Explore more
        * Fleksy 3.0 brings more languages, customisation options
        * Sensor-Powered Seatbelt Could Save the Lives of Sleepy Drivers
        * Microsoft Parodies “I’m Sexy And I Know It” And It’s The Worst
        * iPhone 6: here’s our wish list

        * Oculus Rift DK2 Pre-Orders Ships
        * Samsung Galaxy S5 Alpha Images Leaked (Rumor)
        * Skype For Android 5.0 Sniffs Out Your Friends Automatically
        * HTC Denies Smartwatch Reveal In Video
        * Uber Arrives On Windows Phone
        * Shoddy WordPress Plug-In Opens Backdoor To 50,000 Sites
        * How Hackers Attack Everyday People and Ways to Protect Yourself

        * Royals 2, White Sox 1: Series ends with a thud
        * After pitching duel, mishap at plate stings Sox
        * After pitching duel, catching error stings Sox
        * Sox turn to Noesi to open four-game set in Minnesota
        * Top Sox pick Rodon debuts in Rookie League
        * Sox remember Buehrle's perfecto on anniversary
        * Flowers makes it for son's birth just in time


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

        Archives
        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


        * Oak Lawn to start huge water improvement projec.....
        * OUR VIEW: Quinn, let's get real about jobs data.....
        * Bond-rating agency shifts state financial outlo.....
        * 6-Years Later, Part Two - WICS-TV..


        * Childhood traumas more common in military members
        * US seeks to strip ex-charity head of citizenship
        * Chicago school board approves $5.8 billion budget
        * Cook County voters will get guns ballot question
        * High school track coach accused of sexual assault
        * Standard & Poor's gives Illinois negative outlook
        * Ruling: Records in Bloomington case are public
        * Trial date set for 1 of 4 charged in Joliet deaths
        * Ex-Illinois gov: Namesake building 'a scrap heap'
        * Beckman believes Brattan a good fit for line

        * Libertarian, Green Party politicians seeing blocks by established parties
        * S&P drops Illinois' credit rating to 'negative'
        * Prosecutors respond to new Blagojevich argument
        * Former governor Thompson: Namesake building 'a scrap heap'
        * Search salary information for state, city, county employees
        * Quinn signs legislation to combat flooding
        * GOP group targets Democratic supermajority in Illinois
        * Emails raise questions of politics in Quinn's anti-violence program
        * Illinois Manufacturers' Association backs Rauner for governor
        * Illinois patients to docs: 'What about marijuana?'

        * Billionaire Ken Griffin files for divorce
        * Chicago-area meat supplier admits fault in China food safety scandal
        * S&P threatens downgrade over Illinois budget trouble
        * Politics in Quinn’s anti-violence program? Probe focuses on emails
        * Daley presenting medical evidence behind closed doors: report


        * for its own security, Israel must finish the job it started in Gaza
        * Person of interest questioned in shooting death of 11-year-old; family seeks donations for funeral
        * Snoop Dogg reveals he smoked weed at White House
        * Track coach at Simeon faces sexual assault charges involving students
        * Chicago State official sues UIC, claims it violated privacy law by discussing plagiarism claim
        * Charges filed in April shooting death of Simeon football player
        * Northbound lanes reopen after fatal accident on Bishop Ford Freeway


        * Chief judge came close to shutting Chicago's federal court during government shutdown last fall
        * At least two shot in Fuller Park
        * Willis clan hopes America's Got Talent run shows family's strength
        * Family opens up about Chicago police officer killed in crash
        * Sources: Suspect questioned in killing of 11-year-old Shamiya Adams
        * Judge: Daley won't have to testify due to health
        * Judge: Daley won't have to testify due to health
        * Chicago School Board approves $5.8B budget
        * Chicago School Board approves $5.8B budget
        * Convicted developer seeks release from custody to repair marina he admitted ripping off


        * Illinois' Credit Prognosis: Negative
        * The Big Sort
        * Questions raised about Daley's health
        * Losing school librarians in Chicago Public Schools
        * Durbin Files Legislation Reacting To Hobby Lobby Decision
        * "The Civil War" Becomes A Downtown Musical
        * Republican Attorney General Candidate: Pension Changes Unconstitutional
        * Winners of WBEZ’s Student Stories
        * Court OKs FutureGen Financing Plan
        * Trucker Questions: Are Police Above Illinois' Traffic Laws?


        * Stocks-Smith considers another run for mayor
        * GROW-IL Coalition: Illinois’ foot-dragging means lost dollars from fracking
        * Eugene Robinson: The downside of giving weapons
        * George Will: Goldwater 2.0
        * S&P drops Illinois' credit rating to 'negative'
        * Former governor Thompson: Namesake building 'a scrap heap'
        * Quinn signs legislation to combat flooding
        * Emails raise questions of politics in Quinn's anti-violence program
        * Illinois patients to docs: 'What about marijuana?'
        * State appeals court upholds FutureGen power agreement


        * FLING: IN BRIEF
        * Covering the arts
        * Davidsmeyer to open Jerseyville office
        * Republican chair details plan for new commissioner
        * River reopens after barges freed
        * Marijuana ‘gatekeepers’ preparing now
        * State closes Greene food processor after numerous violations
        * Police reports
        * Looking Back (July 24, 2014)
        * Longer title but similar mission for Hood


        * 4-year-old boy dies in Bensenville house fire
        * Ocean crash kills teen pilot seeking world record
        * Joliet Catholic stops Prospect's summer surge
        * Images: Wednesday at the Lake County Fair
        * Glitch crashes global U.S. passport, visa operations

        * Video: Skokie's Turning Point celebrates 4...
        * Mystery Loan Lets Ex-Representative Jesse ...
        * Atanus disputes email announcing withdrawa...
        * Statement by Rep. Jan Schakowsky on Tragic...
        * Mystery loan lets Jacksons keep both homes...
        * Statement by Rep. Jan Schakowsky on Suprem...
        * The Civil Rights Movement 50 Years Later -...
        * Statement by Rep. Jan Schakowsky on Suprem...
        * Schakowsky Joins Cicilline and other Lawma...
        * Rep. Jan Schakowsky Joins Rep. Cicilline a...

        * Share Article...
        * Share Article...
        * Share Article...
        * Share Article...
        * Share Article...

        * Bob Dole won't give up on disability treaty...
        * Israeli Airline With Missile Defenses Goes......
        * SAN BERNARDINO COUNTY: Key charge dismisse......
        * Dole back on Hill to try and push through ......

        * Sheriff Dart, Chicago Faith Leaders Discuss Incarceration Alternatives For Mentally Ill Inmates (VIDEO)
        * FLATS Chicago Developer, City Partnering On Affordable Housing Program
        * Chicago Board Of Ed Approves Budget, Debate Over School Funding Rages On
        * FLATS Chicago Developer, City Partnering On Affordable Housing
        * Crowd At Reclaim Campaign Public Meeting
        * Students With VOYCE Ahead Of Chicago Board Of Education Meeting
        * Illinois makes it illegal for employers to ask about applicants criminal background
        * Bost says Enyart an accessory to newly uncovered Obamacare fraud and abuse
        * Editorial: Why won't a grocer set up shop in South Shore?
        * Obama Executive Orders New Attack on Religious Liberty


        * Governor Quinn Signs Legislation to Help Combat Flooding in Illinois - Oak Lawn to Receive $12.7 Million in Stormwater Assistance as Part of New Law’s Expansion of Clean Water Initiative
        * Governor Quinn Statement on Cook County Board’s Additional Advisory Referendums - Cook County Voters Asked to Voice Their Opinions on Gun Safety and Mental Health Care on November Ballot
        * Governor Quinn Signs $1.1 Billion Capital Construction Bill - Shovel Ready Projects Will Create Thousands of Jobs and Drive Economic Growth
        * Governor Quinn Signs Legislation to Strengthen Ethics Provisions in County Government - Law Helps Increase Accountability for Public Officials in Illinois’ Collar Counties
        * Governor Quinn Signs Legislation to Help Ease Pain for Adults and Children with Seizures - New Law Adds Seizures to List of Debilitating Medical Conditions Under the Compassionate Use of Medical Cannabis Act




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