The Cuomo administration braced for the potential loss of billions of dollars in federal aid to New York State as word spread that the congressional Supercommittee tasked with slashing $1.2 trillion from the federal budget had failed to reach a deficit reduction plan Monday.
The committee’s failure to present a plan kicks automatic budget cuts into effect in 2013 that could cost New York $5 billion in federal subsidies over 10 years, according to a statement released by Gov. Andrew Cuomo after an emergency conference call with his economic advisers.
An anonymous source told the New York Post that the state also stands to lose 155,000 federally funded jobs.
New York receives around $40 billion a year in federal funding, about 30 percent of the total state budget, according to the Post. Cuomo said his economic advisers are considering different scenarios to account for the budget gaps.
Some lawmakers support Cuomo’s preparations but say that Albany helped to create the culture for this type of economic brinksmanship.
“We have a spending problem in Washington. We have a spending problem in Albany,” said New York State Assembly Minority Leader Brian Kolb in an interview with Capitol Correspondent Susan Arbetter.
Mayor Michael Bloomberg said the missed deadline is a result of President Barack Obama’s failure as a leader. “It’s the chief executive’s job to bring people together and to provide leadership in difficult situations,” the mayor said, according to PIX11. “I don’t see that happening.”
Washington legislators are already working to undo some of the planned automatic cuts, which would be split evenly between defense and domestic spending, but Obama said on Monday that he would veto any legislation that would stave off the cuts.
Stock prices fell sharply Monday on the news of the Supercommittee’s imminent failure.
[COVE playersize=”512×288″ chapterbar=”on” episodemediaid=”2169737206″]News that the congressional Super Committee has failed to come to an agreement could mean a loss of both jobs and revenue for New York. But as Capitol Correspondent Susan Arbetter reports, not everyone is placing blame exclusively on Congress.