MEDIA RELEASE: The federal debt-ceiling deal is a bad deal for North Carolina

MEDIA RELEASE: The federal debt-ceiling deal is a bad deal for North Carolina
Deal will adversely impact communities and the state’s economy by cutting support for critical public investments

RALEIGH (Aug. 30, 2011) – The recent federal debt-ceiling deal is a bad deal for North Carolina, with cuts directly impacting communities and the state’s economy, according to a report released this morning.

North Carolinians are still struggling to recover from the Great Recession, but the debt deal threatens to slow the state’s already-weak economic recovery, according to the new report by the North Carolina Budget & Tax Center. The debt deal will force cuts to critical federal investments, including education, job retraining, health services, maintenance and improvements to roads and bridges, and research for innovation and growth for a 21st century economy. To make matters worse, the deal ignored the country’s highest priority by neglecting to include any efforts to put people back to work across the state, the report says.

If the Supercommittee process fails, across-the board cuts of $1 trillion over nine years will put an enormous burden on the same public investments and services affected by the first round of debt-deal cuts, the report states. In North Carolina, funding for public schools, housing, maternal care, early childhood education, worker retraining and science research will all be in competition with one another for an ever-shrinking amount of funds starting in 2013.

The debt deal’s potential cuts to national defense, the report says, are likely to hit North Carolina’s military communities – and the state’s economy – especially hard. Major cuts to the military will occur if the Supercommittee fails to take a balanced approach, and the impact of these cuts will be felt across North Carolina, as the military’s presence in the state accounts, directly and indirectly, for roughly one in ten jobs.

“These harmful consequences underscore the need for the Supercommittee to take a balanced approach to reducing the long-term deficit,” said Edwin McLenaghan, a policy analyst with the Budget & Tax Center and author of the report. “They must also implement concrete measures that will boost the economy and create good jobs for the millions of Americans – and half-million North Carolinians – who are still struggling to find work.”

FOR MORE INFORMATION, CONTACT: Edwin McLenaghan, Policy Analyst, Budget & Tax Center,, 919.856.3192; Jeff Shaw, director of communications, NC Justice Center,, 503.551.3615 (mobile).