Uncertainty lingers for Texas, other states with federal deficit deal

[sonias]

AAS 8/1/11
Uncertainty lingers for Texas, other states with federal deficit deal

Texas traded one source of uncertainty for another as Congress took steps to cement a deal to raise the federal debt limit Monday.

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The unknown now is how the anticipated $2.1 trillion in federal budget cuts during the next 10 years could trickle down to them.

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Federal dollars account for $54 billion — or about one-third — of Texas' upcoming two-year budget. Much of that money helps pay for Medicaid, a joint state-federal program that provides health care for Texans with disabilities or very low incomes.

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Another factor at play in Texas could be the mandated cuts to defense spending.

"Texas has a proportionately high military component to our economy, so if the cuts in military spending are severe, Texas could be hurt more than other states," said Dale Craymer , president of the Texas Taxpayers and Research Association. "Still, our economy is much more robust than the rest of the nation, and that will provide insulation."

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