Shutdown leading states to eliminate aid for poor

Bloomberg News
States are planning to idle workers and eliminate services because of U.S. funding that stopped flowing as a result of the partial federal government shutdown. More

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GOVERNMENT

Shutdown leading states to eliminate aid for poor

Bloomberg News
Posted 10/14/13

States are planning to idle workers and eliminate services because of U.S. funding that stopped flowing as a result of the partial federal government shutdown.

Michigan is preparing to put as many 20,000 state workers on unpaid leave and eliminate cash and food aid to poor residents. North Carolina furloughed 366 employees and closed its nutrition aid program to tens of thousands of women and children. Illinois last week was considering furloughing hundreds of federally funded employees, including workplace-safety inspectors.

The state-level fallout shows the widening impact of the first partial shutdown of the federal government since 1996, as Republicans refuse to pass a budget unless President Barack Obama agrees to roll back part of his health care law. About one-third of the $1.7 trillion that states spent in 2012 came from the federal government, according to the National Association of State Budget Officers in Washington.

“It’s not the way America should conduct its activities,” Ohio Gov. John Kasich, a Republican, told WBNS-TV in Columbus on Oct. 4. “When you’re a congressman, you can pontificate and be a big shot, but you really don’t have any responsibility. When you’re a governor, you got a lot of responsibility. Things have to work.”

The federal government is poised to hit its statutory borrowing limit this week, which would cut even deeper into the government’s ability to spend.

The shutdown, which began on Oct. 1, has closed federal parks, idled workers and hurt the economy. It has also crimped funding for state programs run on the U.S. government’s behalf.

While the largest state-run federal program, Medicaid, which provides health care for the poor, hasn’t been affected, others are poised to run out of cash unless a budget is passed or states use their own money to keep them afloat.

“We’re right on the cusp of the point where they are going to have to make some difficult decisions,” said Scott Pattison, executive director of the association. “Do they put their own money into these programs that are not being funded, or do they not fund them either?”

Without a resolution soon, state officials say they would be forced to cut programs including: Temporary Assistance for Needy Families, which provides cash-payments to the poor; nutritional assistance programs including the Supplemental Nutrition Assistance Program, known as food stamps; and grants to help residents pay their energy bills. States are also considering whether to furlough workers whose salaries are paid for at least partly by the federal government.

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