By John Fritze, The Baltimore Sun
6:05 PM EST, February 23, 2013
A bipartisan group of governors expressed concern Saturday over the impact looming federal budget cuts will have on their states but had few ideas for how to break the latest fiscal impasse gripping Congress.
Most of the nation's governors, including Maryland's Martin O'Malley, are in Washington attending a meeting of the National Governors Association — an annual gathering that this year happens to fall just days before $85 billion in across-the-board federal spending reductions are set to begin.
Because of its geographic and economic ties to the federal government, Maryland would be hard hit by those reductions. Federal spending on goods and wages in Maryland makes up nearly 20 percent of the state's economy, according to an analysis by the nonpartisan Pew Center on the States.
The reductions, known as sequestration, will begin Friday unless lawmakers find a deal to avoid them first. If allowed to continue, sequestration would amount to $1.2 trillion in cuts over a decade with roughly half coming from defense spending and half coming from domestic programs.
Hope that the cuts can be delayed has dimmed as Democrats and Republican have been unable to agree on whether new revenues should be considered.
"If the Republicans are intent on flicking this switch to see what happens, I hope they're as ready to come back into session to mitigate the damage afterward," O'Malley said in an interview Saturday. The cuts, he said, would "ripple throughout our economy."
Some conservative lawmakers say they support the cuts as a way to trim annual $1 trillion budget deficits, and they accuse Democrats of overstating the impact the reductions will have on the economy and individuals. But Republican governors on Saturday sounded more cautious — asking President Barack Obama and Congress to give them power to decide where the reductions will be made.
"We understand that the federal government is going to be making cuts," said Oklahoma Gov. Mary Fallin, the Republican vice chair of the governors association. "I think we can lessen the effect of sequestration if the states are given flexibility."
For many states, the effects of the cuts will be limited by the fact that some of the largest infusions of federal grants to their budgets — including money used for Medicaid — are exempt from sequestration. But the situation in Maryland is different. Economists say expected furloughs of the federal workforce alone could have an impact in a state that more than 300,000 federal employees call home.
That doesn't include reductions that would ultimately trickle down to the state's large share of federal contractors.
The Obama administration, meanwhile, has been calling attention to other changes that would occur under sequestration, such as longer security lines at the nation's airports, reductions in special education programs and cuts to the federal program that helps low-income families pay for heat and air conditioning.
O'Malley has proposed increasing the state's rainy day fund and cash reserves in part, he said, to help backfill some of those reductions.
Democratic governors emerged from a meeting with Obama at the White House on Friday vowing to press their Republican colleagues on the issue. Both Republican and Democratic governors were scheduled to have dinner at the White House on Saturday.
Sequestration doesn't appear as a topic for discussion on the group's public agenda, but O'Malley said he expected it to dominate closed-door meetings the governors would have over the next two days.
"A lot of Republican governors privately bemoan these cuts," O'Malley said. "We hope that perhaps this meeting …will give them space to voice their concerns in way that may encourage some more reasonable actions by more of the Republican members of Congress in their states."
Copyright © 2013, The Baltimore Sun