The budget crisis facing many states is threatening to undermine key elements of President Obama’s agenda, but with Republicans in control of the House and widespread concern over the federal deficit, he has few options to make a significant difference.
Even those who say Obama needs to secure significant new federal spending to help states avoid cutting health care and education programs and laying off workers acknowledge the limits.
“We know there is not a great appetite for major new funding, but there is a real short-term crisis here,” said Charles Loveless, the legislative director of a powerful labor union, the American Federation of State, County and Municipal Employees.
Eventually, Obama could also come under pressure from state officials and the financial industry to provide emergency aid to states and municipalities if they can’t pay off their debts.
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