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Federal fiscal ‘red ink’ could force cuts to state grants, experts tell Utah commission
Summary
Fiscal experts told Utah’s Federalism Commission that rapidly rising federal interest costs and near-term trust-fund shortfalls make major federal deficit consolidation likely; they urged states to stress-test budgets, build rainy-day buffers and seek devolution or waivers to protect core services.
Utah’s Federalism Commission heard stark warnings Nov. 20 from national fiscal experts who said growing federal interest costs and impending shortfalls in Social Security and Medicare trust funds will push lawmakers in Washington to protect those entitlements and shift the pain from federal to state programs.
Jessica Bridal of the Manhattan Institute told the commission that current federal deficits — roughly $1.8 trillion annually under current conditions — could climb materially over the next decade as interest costs rise, squeezing discretionary spending that funds Medicaid, education, transportation and other programs states rely on. "In order to keep Social Security and Medicare flowing ... they're coming after you," Bridal said, describing how Congress historically protects…
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