Strapped-for-cash states may be up the creek on this one: A jobs bill has stalled in the Senate, jeopardizing billions in federal aid to struggling states. Local and state officials are warning of layoffs in the hundreds of thousands and drastic spending cuts if the bill is not resuscitated. –JCL

The New York Times:

Financially struggling states, already facing record budget shortfalls, are now confronting the possibility of losing out on billions of dollars in federal aid that they had been counting on, if Congress does not revive a jobs bill that stalled in the Senate this week.

The result, governors and state budget officers are warning, could be hundreds of thousands of layoffs at the state and local levels, as well as draconian spending cuts.

“It’s a bloodletting,” said Gov. Edward G. Rendell of Pennsylvania, a Democrat.

But Mr. Rendell and other state leaders are running up against Senate Republicans and at least one Democrat concerned about the spiraling federal deficit.

“What we’re not willing to do, is use worthwhile programs as an excuse to burden our children and our grandchildren with an even bigger national debt,” the Senate minority leader, Mitch McConnell, Republican of Kentucky, said in a statement Thursday.

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