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Advocate,

The Budget Control Act of 2011 was passed by the US Congress and signed into law by President Obama on Tuesday to increase the debt ceiling and avoid default. While unemployment remains high and Ohio responds to historic budget cuts, the federal discourse over the past month centered on the depth of cuts. The exact details are uncertain, but it is clear that Ohio stands to lose substantial federal funding for vital programs — such as health, human service, elderly care, and early care & education — in the coming years.

If you're interested in learning more, check out our upcoming webinar entitled The Debt Ceiling Deal: Background and its impact on vulnerable Ohioans on Wednesday, August 10th from 3-4:00 p.m. Click here for more details and to register.

Unfortunately, the debt-ceiling deal does not address our nation’s main problem—persistent joblessness. In fact, the bill contains no initiatives to spur demand, promote growth, or further recovery efforts, such as an extension of unemployment insurance, payroll tax cuts, expanded infrastructure investment, or much-needed aid to the states.

According to Nick Johnson of the Center on Budget and Policy Priorities, the deal will “inevitably lead to large federal cuts in programs for state and local governments,” and that these cuts will begin “in the middle of the worst year for state budgets."

36% of Ohio’s FY 2012 budget come from federal sources. This funding is directed to a wide range of areas, including Medicaid, education, food stamps, school readiness programs, and worker training initiatives. Cuts in these areas would have a devastating effect on our friends and neighbors in Ohio who cannot put food on the table for their families, or who need help getting back to work after being laid off. These cuts would compound reductions to health, human service, and early care & education programs passed in the state budget at the end of June.

Ohio, which faced its largest budget shortfall on record and the end of federal recovery funding, made deep cuts — so much so, that Ohio’s current spending falls below pre-recession levels. A reduction in federal spending will likely slow recovery even further, potentially cause a drastic shift in costs to Ohio (similar to the recent cost-shift from the state to local governments), and reduce support for vital human services. As Ohio's state and local government reduces its workforces, the debt deal will likely lead to future job loss as well.

If you're interested in learning more, check out our upcoming webinar entitled The Debt Ceiling Deal: Background and its impact on vulnerable Ohioans on Wednesday, August 10th from 3-4:00 p.m. Click here for more details and to register.

Thank you for being involved.

Scott Britton, Coordinator

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