SEAN MURPHY Associated Press
First Posted: July 30, 2011 - 1:29 pm
Last Updated: July 30, 2011 - 1:35 pm
The Republic
OKLAHOMA CITY — With the unprecedented possibility of a federal government default, state officials in Oklahoma acknowledge they have no contingency plan in place if the billions of dollars in federal funds flowing into the state were to suddenly stop.
As debate raged in Washington on raising the nation's debt limit before Tuesday's deadline, little information has been provided to states on how the government will decide which bills to pay if the borrowing limit isn't increased.
"We have a lot of concerns, because no one knows what the true impact of a default would mean," said State Treasurer Ken Miller, an economist who returned late last week from a trip to Washington. "One thing we know for certain is that the result would be bad."
Administration officials say without an increase in the debt limit, the government will not be able to pay all of its bills, and U.S. Treasury Secretary Timothy Geithner has warned that a federal default could be catastrophic for an economy still recovering from the worst recession in decade.
In Oklahoma, state officials say there are two general areas of concern: the estimated $4 billion in government-backed securities held by the state and the billions of federal dollars sent to the state every year in the form of social security or federal wages paid to individuals or funding for state agencies... FULL ARTICLE
Posted on
Sat, July 30, 2011
by John Cox