States Brace for Debt Ceiling Default
07/21/2011 - Just the threat of a federal default is prompting California to get a $5 billion loan to make sure it can pay its obligations.
States around the nation are drawing up contingency plans in the event that federal policymakers don't resolve the debt ceiling impasse by Aug. 2. They are preparing for chaos in the municipal debt markets and delays in federal payments for Medicaid, education and other services, which could happen if the federal government defaults on its obligations.
The federal government sent $478 billion to their state and local counterparts last year, according to a report issued Wednesday by the Pew Center on the States. Next month, states are expecting to get $10.4 billion in college tuition assistance alone.
Read the full story at money.cnn.com.
- States' Fiscal Health