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Barnes Warns That Federal Shutdown Would Be Bad News For State Budget

by | Sep 24, 2013 3:58pm () Comments | Commenting has expired | Share
Posted to: State Budget

CTNJ file photo Although the state ended the year in the black, uncertainty in Washington could soon push Connecticut’s budget back into the red, the state’s budget director told agency heads Tuesday.

“A federal shutdown or default would not only derail the economic recovery and significantly affect state revenues, it would also affect state programs that rely on federal funds (the most significant of which is the Medicaid program), and state employees funded, either wholly or partially, through federal funds,” state budget director Ben Barnes wrote in this letter.

He asked agency heads to identify programs and positions that are funded by grants and other outside funding that may be impacted by the potential federal government shutdown or default.

“You should also be aware that my office is considering various contingencies to ensure that the state’s budget remains in balance if tax revenues falter in the face of a shutdown, such as the implementation of allotment reductions (rescissions), further tightening hiring controls (including a hiring freeze which would encompass both state- and federally-funded positions), and limits on contracting,” Barnes said.

Malloy has the authority to cut 5 percent of any appropriation and 3 percent of any fund in a financial crisis without legislative approval. He needs the help of the General Assembly if he wants to cut municipal aid. And he has no authority to rescind money from the judicial and legislative branches of government or the state’s colleges and universities.

The hiring freeze that was implemented last January was lifted in June, but Barnes said he may reconsider it.

The federal budget office has not issued detailed federal guidance to help state agencies make their assessments, according to Barnes’ letter.

But there are still too many unanswered questions to make any definitive statements about what will happen.

“The governor and I are both deeply concerned that the United States Congress, particularly the House, may take reckless actions in the coming weeks that will undermine the improvement that we have seen, and threaten our fiscal condition in the months to come,” Barnes wrote Tuesday.

This week the U.S. Senate is expected to strip the defunding of Obamacare out of the continuing budget resolution, which funds government through the end of the year. The resolution would go back to the U.S. House for approval, U.S. Sen. Chris Murphy explained this weekend to a group of constituents.

Murphy expressed confidence the Republican majority in the House would pass a budget resolution that doesn’t gut Obamacare, but Barnes said the state needs to be ready for a federal shutdown.

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(2) Archived Comments

posted by: newview | September 25, 2013  8:43pm

With all due respect to Mr. Barnes, there is no economic recovery!  All the data points are extremely negative. 

The real unemployment numbers are obscured by incomplete and false data.
The GDP is horrendous.
The Fed is printing $85 BILLION/month. 

We are shipping ungodly amounts of gold and silver to the east.  Gold repatriation is on the move, and we don’t have it to give back…Germany’s request alone is a 7-year venture!!  MAYBE!!  Bullion banks/the Comex are emptying out faster than gold and silver can be produced. 

Inflation is rising although nobody will claim it is…how much more are you paying for groceries?...  enough said.

The National debt is in the trillion range..and climbing and no recourse to get it under control other than to print more money. 

Pensions set aside by federal government have now become assets to balance budgets in attempts to create more debt.  Pensions, 401k’s retirement plans will be next.  State and Federal vouchers will be all you own in your pensions…it’s matter of time. 

I’m not going to continue.

No, Mr. Barnes, respectfully, you are wrong.  Anyone that listens to you and this nonsense about stalling the “recovery”, and actually believes it, has absolutely no clue what is happening out there.

There is NO RECOVERY, and I for one would appreciate it if you would come to the people of Connecticut with some real numbers, real truths, not half baked nonsense everyone needs to hear over and over again. 

My God, this political nonsense needs to stop, it really does, because when this economy comes crashing down again….and it will very soon…everyone will be caught with their pants down because they listened to politicians, like you,  and main street media!  This is a total scam…and more a hindrance to a healthy economy than I care to think about.

posted by: lkulmann | September 29, 2013  6:25pm

We need to Tax Wall Street!
The fact that this State continues to use deception in the budget process and legal practices is so horrifically irresponsible. It’s as if the residents of this State aren’t real or maybe its that they don’t care anymore. I’ve had it! This State chooses to put the residents in harms way repetitively. Boxes of Medicaid applications ignored…State workers taking food stamps from the poor…denying services, meds and on and on. A callous disregard for the health and well being of the public by public workers! There is not one shred of evidence that its going to stop. My legal rights in this State are non-existent. Its time to sue the State of CT. What other choice is there…smh

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