Debt deal raises concerns for states

State officials worry that federal funding for health and other programs could be squeezed by the special congressional committee that will hammer out further spending cuts.

Stateline: For States, Debt Deal Is Short On Details
Medicaid was specifically exempted from a "trigger" mechanism that would reduce spending automatically if the special congressional committee does not achieve its deficit-reduction goals. Still, some governors are worried that deep cuts to Medicaid could be an outcome of the committee's work. Connecticut Governor Dan Malloy, a Democrat, told reporters Monday that cuts made to Medicaid after 2013 could be "devastating" to his state and others. Most states already are being squeezed by Medicaid, with enrollments rising because of high unemployment and a sputtering economy (Gramlich and Maynard, 8/2).

The New York Times: States And Cities Brace For Less Federal Money
Mayors, governors and state lawmakers spent Monday trying to measure how much the deficit deal might cost them in aid, a frustrating task given the fact that many of the details of the reductions in federal spending will not be known until later in the year. But there was no doubt that local governments, many of which have endured several years of brutal budget cuts, were facing even more tough times ahead (Nagourney and Cooper, 8/1).