States uncertain of impact from looming federal shutdown

As the U.S. legislators fail to come to an agreement on the FY 2010-2011 federal budget, states begin to wonder what will happen to their own budget negotiations and services.

Legislators were unable to agree on a budget by Wednesday evening after a lengthy meeting between Senators Boehner, Reid and Schumer. Legislation must be proposed 72 hours before a final vote, which that a another continuing resolution to extend temporary funding beyond Friday night would had to come before Thursday.

Most expect that most services will not be interrupted by a short-term government shutdown, but state and local workers employed with federal dollars may have to be furloughed. A short-term shutdown of up to a couple of weeks would expectedly have minimal impacts on state governments without too much harm to their own operations or financial integrity. However, many counties have come to rely on frequent and rapid transfers of resources from the federal government in social services such as Temporary Assistance for Needy Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP), or food stamps. The increasing use of computerized data and electronic transfers in these programs since 1995 (the last shutdown) make it unclear what would happen, specifically.

Sen. Boehner and Sen. Reid are still optimistic that a deal can be reached before the Friday deadline, but others are less certain. The Democrats have now agreed to as much as $33 billion in cuts to the budget, while the Republicans have stood by their proposal of $61 billion in cuts. After weeks of stonewalling by the GOP, Boehner reportedly conceded to reduce the cuts to as low as $40 billion, but Democrats have complained that the terms of a compromise keep moving further back.

Read more from the NYTimes article States Fear Local Effects if Shutdown Cuts Off Cash.

ADENDUM: Well clearly federal legislators and Pres. Obama were able to come to an agreement before the deadline Friday night, a with a whole hour to spare! What they actually passed was sort of an emergency place-holder bill that allows the specific text of the fiscal bill to to sit for 3 days (as per rules) without shutting the government down. If any of you have finished a term paper the "morning-of", you know how this goes.