Pa. officials optimistic on operations

Associated Press

HARRISBURG, Pa.

Pennsylvania state government can operate for a while without interruption even if Congress doesn’t raise the debt ceiling and the federal government stops sending some money to states, a spokesman for Gov. Tom Corbett said Wednesday.

Corbett’s spokesman, Kevin Harley, said the state has enough money to function for at least a matter of weeks if the federal government can’t pay some bills.

“We don’t have any major concerns at this point,” Harley said. “We have enough money to keep going.”

Harley warned, however, that some things that rely on large federal payments, like construction projects, may have to be put on hold. He also acknowledged that there are a lot of unknowns about what the federal government would do in a partial shutdown, and how payments for things like highways and Medicaid might be affected.

Overall, Pennsylvania expected to receive about $22 billion in federal funds in this fiscal year, as part of its wider $63.6 billion total operating budget projected by Corbett in March.

Corbett’s budget office said that the state government began the year with about $1 billion on hand. Most of that money came from surplus tax collections that carried over from the just-ended fiscal year, but some came from unspent money left in some programs.

Pennsylvania’s members of Congress on Wednesday were reporting heavier than usual correspondence from constituents about the debt limit debate. At the office of Sen. Bob Casey, the daily volume of calls, emails and letters had more than doubled.

“I think the one resounding message that we’re getting in the last few days is ... you guys have got to work together so we can pay our bills,” Casey said.

People also expect a reduction in spending and progress on the deficit and the debt, but primarily they are concerned about a downgrade in credit rating and bills going unpaid, he said.

“They know what the stakes are,” Casey said. “They know in their life that if someone sends them a bill for services, they have to pay it,” he said.

The AARP was delivering petitions this week to every member of Congress in Pennsylvania. It collected a total of 63,000 signatures on petitions protesting the potential of cuts in Medicaid and Social Security benefits as part of a deal to address the federal deficit.

“Cutting the benefits I have earned in either of these two programs instead of cutting other ineffective forms of government spending will unfairly put the heavy burden of federal budget cuts on the backs of America’s seniors,” the petition read.

Rick Bloomingdale, president of the AFL-CIO federation of labor unions in Pennsylvania, said he was planning to meet with union leaders on Thursday to develop a strategy to put pressure on members of Congress if the federal debt ceiling isn’t lifted in time.

A failure to raise the debt level could damage people’s retirement accounts and result in “some demonstrations outside of offices to start sending messages,” Bloomingdale said. “I think we’re in this position where everyone thinks cooler heads will prevail, and everyone hopes these guys will wake up in time from this nightmare.”

Allyson Muir, 44, of Lancaster, Pa., has been trying to sell her house since May. Her husband and two children have already moved to South Carolina, where her husband is working three jobs to make ends meet.

Having already reduced their asking price by $25,000, Muir, a public school teacher, worries that a U.S. default will lead to a spike in mortgage interest rates and make it that much harder to sell the house.

“People are already scared to buy homes. And if the interest rates go up, that’s it for the housing market. It’ll be worse than it is now, and it’s not good now,” she said. “Five years ago, our house, because it is completely remodeled, would have sold in a week for asking price. Now every month we are lowering the price a little more and a little more and that’s not making much of a difference.”

She said politicians have lost sight of the struggles of everyday Americans.

“The corporations are getting off easy. These big corporations are not paying taxes, or the amount of taxes that they should. The upper middle class and the middle class are getting pulverized,” she said.

“With all of the decisions they make (in Washington), I’m not sure they are seeing how the average family is struggling. ... It’s not about the big corporations or your multimillion-dollar business executives, it’s about the average family and they are losing sight of that somehow.”

The Muirs, who have one child entering college and another entering high school, recently bought a bowling alley to help fund their retirement.

“Why would an average family like us buy a bowling alley? Our husband’s worried about our retirement. He said, ‘Our 401(k) isn’t going to cut it. We have we have to do something or we’re not going to have anything when we retire.”’

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Associated Press writer Michael Rubinkam in Allentown contributed to this report.