Fitch: 'fiscal cliff' significant risk to U.S. states
REUTERS - Fitch Ratings warned in a special outlook on Monday that the impending tax increases and federal spending cuts that make up the U.S. "fiscal cliff" pose the most significant credit risk to states in 2013.
"The risk that the fiscal cliff presents to the overall economy is the biggest concern for state credit, as state revenue systems quickly reflect changing economic conditions," said Laura Porter, managing director at the rating agency, in a statement.
Washington's attention has recently focused on the tax section of the cliff but political leaders in states, cities and other parts of the public sector are growing increasingly alarmed about the spending side.
The automatic spending cuts set to take effect early next year are spread throughout the entire federal budget. This would slice funds for states, many with revenues still bruised by the 2007-09 recession, and programs such as Medicaid that states operate with federal reimbursements.
"Decisions that shift cost of services from the federal to state governments, while requiring the states to provide the same level of services, would be most concerning," the report warned. (Reporting By Lisa Lambert and Caryn Trokie; Editing by Chizu Nomiyama)
- Tweet this
- Share this
- Digg this
- Wal-Mart and allies in face-off with Apple Pay over mobile payments
- Islamic State kills 220 Iraqis from tribe that opposed them
- India's universal healthcare rollout to cost $26 billion
- PM Modi boots officials out of the first class cabin
- Bharti Airtel Q2 net profit doubles as India market turns corner
India's universal health plan that aims to offer guaranteed benefits to a sixth of the world's population will cost an estimated 1.6 trillion rupees ($26 billion) over the next four years, a senior health ministry official said. Full Article