Budget Politics Shift as Federal Deficit Recedes, State Surpluses Appear

This week saw the case for budget austerity at both the state and federal levels continue to rapidly fall apart. A new Congressional Budget Office report showed that the federal budget deficit problem may not actually be that much of a problem anymore, and debates over what to do with budget surpluses began to percolate in the states as treasuries started to count tax revenues that came in last month, even as the pain from sequestration cuts also continued to be felt in all fifty states:

The Congressional Budget Office report released this week projects that the federal budget deficit will shrink "far faster than anyone in Washington expected, and perhaps even faster than many economists think is advisable for the health of the economy." [New York Times]

That would mean "the debt disaster that has obsessed the political class for the last three years is pretty much solved, at least for the next 10 years or so." [Washington Post]

A look at how austerity policies literally kill: "rates of [excess] suicides were significantly greater in the states that experienced the greatest job losses." [New York Times]

How the obsession with the federal deficit has led to austerity measures that are preventing the unemployment rate from dropping to 6.1%. [New York Times]

In California, the debate is now over what to do with a budget surplus of about $4.5 billion thanks to additional revenue brought in by the economic recovery and new tax rates approved by voters last year. [Huffington Post]

The debate is dividing legislators and Gov. Jerry Brown, who would prefer to continue to hold back on reinvesting in state programs that had previously been cut. [Sacramento Bee]

Ohio is also about to enter a debate over what to do with a surplus. [Columbus Dispatch]

Op-ed: Why Wisconsin should use their surplus to help low-income residents. [Wisconsin State Journal]

Why a revenue uptick is not necessarily a sustainable surplus. [Citizens for Tax Justice]

Meanwhile, the federal cuts in sequestration continue to hit people relying on unemployment benefits, this time in Alaska. [Juneau Empire]

Thousands of low-income families seeking housing in Connecticut also continue to feel the pain from sequestration. [WTNH]

As do senior citizens in eastern Texas who rely on Meals on Wheels. [News-Journal]


(This article originally appeared in the Stateside Dispatch, Progressive States Network's email roundup of the latest state policy news. Read the full Dispatch from May 17, 2013 here or sign up to receive the Dispatch in your inbox here.)