States nervously watch debt-ceiling impasse
The U.S. government's stalemate over raising the debt limit is taking a growing toll on states as Tuesday's deadline draws near, with some canceling bond sales and identifying roadwork and other expenditures that could be delayed. "As the deadline to Aug. 2 comes closer, people are really, really worried," says Scott Pattison, executive director of the National Association of State Budget Officers. A failure by Congress to raise the $14.3 trillion federal debt limit would lower the nation's credit rating and raise borrowing costs for states as well as 7,000 cities, counties, universities and non-profits. That's partly because many interest rates — for everything from municipal bonds to mortgages — are benchmarked to U.S. Treasuries.