Just before the federal government declared default, the U.S. Senate announced Wednesday afternoon it reached a deal to avoid the fiscal cliff and get the federal government working again. But the Senate must still vote on the measure and so must the House of Representatives. Only then can a bill emerge that President Obama must sign -- before midnight tonight.
Sen. Harry Reid, the Democratic leader, said on the Senate floor at midday that his party and Republicans had found their way to a compromise to “provide our economy with the stability it desperately needs” and avert financial disaster, NBC News.com reported on its website.
His Republican counterpart, Sen. Mitch McConnell, R-Ky., offered his blessing: “This is far less than many of us had hoped for, frankly, but is far better than what some had sought.”
The Senate agreement would keep the federal government operating through mid-January and extend the government's borrowing power through Feb. 7, NBC News reported.
Despite the positive developments in the nation's capital, Kentucky Gov. Steve Beshear went ahead with an afternoon news conference in Frankfort where he laid out the impacts on average Kentuckians if the federal impasse wasn't fixed by the first of November.
“I am both disgusted and heartsick about the continued antics in Washington, D.C. Our elected leaders seem to forget that their actions – or rather, inactions – have real effect on citizens,” Beshear said in a statement. “Here in Kentucky, we have pregnant mothers who will lose access to healthy groceries; families who will lose access to child care and elderly citizens who won’t be able to afford their heating bills as we approach cold weather.”
“These are not the actions of a government attuned to the needs of its people,” he said “These are the actions of a privileged few so divorced from the day-to-day lives of their constituents that the suffering is a political afterthought, something to be managed after the cameras leave. In Kentucky, we put people first, politics second. It apparently doesn’t work that way in Washington.”
Approximately $8 billion in federal funds flow through Kentucky’s state government every year, but more than 85 percent of those funds are not impacted by the shutdown. Some programs, such as Medicaid, already have funds appropriated to them. For other programs, such as highway construction, permanent appropriations are set in statute and are not subject to annual approvals.
That leaves about $900 million in annual spending for programs that are currently at risk of complete closure – an average of $75 million monthly for federal programs operating in Kentucky.
Speaking with reporters, Beshear pledged that state government would do its best to keep those programs operational past Nov. 1 and would evaluate available cash flow closer to the end of the month.
“We have to weigh our options carefully,” Beshear said. “Even if we have available funds to spend on supporting these federal programs, we currently have no guarantee that the federal government will reimburse us for those costs. If we aren’t reimbursed, we will have to make cuts in those federal services, or allow them to lapse altogether, in order to balance our books by the end of the fiscal year on June 30, 2014. There are no good options here for the state or for our citizens.”
Beshear said thousands of Kentuckians who depend on assistance to have enough food to eat could lose access to the program within two weeks.