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Sat. 8:25 P.M.: Governors: Looming cuts threaten economic gains

February 23, 2013
By KEN THOMAS - The Associated Press , Tribune Chronicle | TribToday.com

WASHINGTON - Washington's protracted budget stalemate could seriously undermine the economy and stall gains made since the recession, exasperated governors said Saturday as they try to gauge the fallout from impending federal spending cuts.

At the annual National Governors Association meeting, both Democrat and Republican chief executives expressed pessimism that both sides could find a way to avoid the massive, automatic spending cuts set to begin March 1, pointing to the impasse as another crisis between the White House and Congress that spooks local businesses from hiring and hampers their ability to construct state spending plans.

Hawaii Gov. Neil Abercrombie, a former congressman, noted that the cuts - known in Washington-speak as "the sequester" - could lead to 19,000 workers laid off at Pearl Harbor, site of the surprise attack in 1941 that launched the United States into World War II.

"That will undermine our capacity for readiness at Pearl Harbor. If that doesn't symbolize for the nation ... what happens when we fail to meet our responsibilities congressionally, I don't know what does," he said.

The budget fight came as many states say they are on the cusp of an economic comeback from the financial upheaval in 2008 and 2009. States expect their general fund revenues this year to surpass the amounts collected before the Great Recession kicked in. An estimated $693 billion in revenues is expected for the 2013 budget year, nearly a 4 percent over the previous year.

At their weekend meetings, governors were focusing on ways to boost job development and grow their state economies, measures to restrict gun violence and implement the new health care law approved during Obama's first term.

Some Republican governors have blocked the use of Medicaid to expand health insurance coverage for millions of uninsured while others have joined Democrats in a wholesale expansion as the law allows. The Medicaid expansion aims to cover about half of the 30 million uninsured people expected to eventually gain coverage under the health care overhaul.

Yet for many governors, the budget-cut fight remains front-and-center and fuels a pervasive sense of frustration with Washington.

"My feeling is I can't help what's going on in Washington," Gov. Terry Branstad, R-Iowa, said in an interview Saturday. "I can't help the fact that there's no leadership here, and it's all politics as usual and gridlock. But I can do something about the way we do things in the state of Iowa."

 
 

 

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