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Wis. GOP introduces federal debt contingency bill

Wis. GOP introduces federal debt contingency bill

By the Associated Press. CREATED Jul 29, 2011

MADISON, Wis. (AP) -- Wisconsin agencies would have to devise contingency plans if the federal government can't meet its funding obligations to the state under a new Republican bill.

The measure comes as President Barack Obama and Republicans struggle to reach a deal on the nation's debt ceiling before a threatened Aug. 2 government default. Wisconsin depends on federal aid to run a host of programs ranging from Medicaid and food stamps to highway repairs and unemployment benefits.

Republican Gov. Scott Walker's top aide released a report earlier this week that found Wisconsin has enough cash on hand to replace any lost federal dollars for at least three months. The state may have to re-prioritize spending if the federal government remained in default much longer.

Under the bill, each agency would have to include in its biennial budget requests an analysis of how a long-term federal default would affect programs, strategies to minimize losses and mitigate the impact, a plan for monitoring the federal government's solvency and contingencies if indicators show the federal government may not be able to meet its obligations.

Walker could conceivably order state agencies to do the same thing and bypass the legislative process. The governor's spokesman, Cullen Werwie, said in an email that the state Department of Administration would adjust on an agency-by-agency basis because a federal default might mean funding for some and not for others.

U.S. Treasury Department officials said Thursday they would release details in the coming days on what payments they would make if Congress fails to raise the nation's borrowing limit by the deadline.

But the bill's supporters say the measure provides a long-term approach. Rep. Michelle Litjens, R-Vinland, one of the bill's chief authors, said lawmakers need to face the problem head-on because long-term defaults could affect state budgets for years to come.

"Even if they raise the debt ceiling this year, this problem is going to come back," Litjens said. "Wisconsin needs to find a way to provide services with state money if the federal money doesn't come."

The future of the bill is unclear. The Assembly Ways and Means Committee held a public hearing on the measure Thursday, but the committee's chairwoman, Rep. Samantha Kerkman, R-Randall, hasn't scheduled a vote. Litjens said the bill may need more research, particularly on whether state agencies could provide such analyses.

The four Democratic committee members didn't immediately return messages left at the state Capitol offices and district telephone numbers early Thursday evening.

Republicans control both the Assembly and Senate, but spokesmen for leaders in both houses didn't immediately return messages seeking comment on the bill's chances. Litjens said her colleagues are warming to the bill as the impasse in Washington goes on.

"When we first proposed this," she said, "I don't think as many people thought it was necessary. Now when you talk to legislators, they can see the writing on the wall. Our federal government is spending more money than it takes in and how long can we continue to do that?"

(Copyright 2011 by The Associated Press.  All Rights Reserved.)