States Plan Cuts in Aid to Poor as U.S. Shutdown Forces Layoffs

States are planning to idle workers and cut services because federal funding is drying up as a partial U.S. government shutdown extends into a 10th day.

Michigan is preparing to put as many as 20,000 workers on unpaid leave and eliminate cash and food aid to the poor. North Carolina sent 366 employees home and closed its nutrition aid program to tens of thousands of women and children. Illinois this week may issue furloughs to hundreds of federally funded employees, including workplace safety inspectors.

The state-level fallout shows the widening impact of the first partial U.S. government shutdown since 1996, as Republicans won’t pass spending bills unless President Barack Obama agrees to roll back part of his signature health-care law, which he refuses to do. About a third of the $1.7 trillion that states spent in 2012 came from federal sources, according to the National Association of State Budget Officers.

“You send people to D.C. to work,” South Carolina Governor Nikki Haley, a Republican who drew support from the Tea Party movement, said Oct. 8 at a luncheon for business and civic leaders in North Charleston. “You don’t send them to shut something down. So I am frustrated with both the Republicans and the Democrats. There are no saints in Washington right now.” Read more >>