How the Debt Ceiling Plan Could Affect California

Capitol Hill witnessed a 74-26 vote, as the Senate discussed and approved the debt ceiling bill Tuesday. The Christian Post reports that among the supporting votes were Democratic senators Barbara Boxer and Dianne Feinstein. The next step is the selection of a joint committee -- within 14 days -- that will decide where the mandated $1.2 trillion in spending cuts can be made.

Already in an economic slump, the State of California is bracing for the impact that a decade worth of spending cuts might make on the Golden State. Who fears the impact and why?

* The Sacramento Bee puts California's general fund budget at $85.9 billion. Earmarks eat up a huge chunk of the state's income, and Gov. Jerry Brown and the lawmakers count on a federal contribution of $79 billion to California's empty coffers. Agencies depending on these funds include the Department of Transportation, public school system and the University of California system.

* One potential casualty of the debt ceiling plan might just be the hotly pursued high-speed rail project that promises an alternative to clogged freeways with "100 percent clean electricity" to boot. A July 19 press release by the California High-Speed Rail Authority crowed that federal authorities were on board financially to help bankroll the project. The planned groundbreaking -- and first phase of the high-speed rail -- is slated to start in 2012 and carries a $43 billion price tag.

Although funding is to come from state bonds and partnerships with the private sector, federal funding awards are necessary to make the project happen. Will the committee in charge of allocating spending cuts continue to champion this ambitious project? To quote the Sacramento Bee: "The Republicans who control the House already have targeted bullet trains as very expendable."

* Cotton farmers and rice producers in California, although very much in the minority, also have the potential for feeling the pinch. The Environmental Working Group shows that in 2009, growers of cotton received $198 million in farm subsidies while rice growers were allotted in excess of $73 million. If you consider that these crops represent less than 3 percent of California's combined crops harvest in 2008, there is good reason to fear these subsidies might end or get scaled back. In 2010, all crop growers in California received a total of $407 million in USDA subsidies, which places it 13th on the list of most farm-subsidized states.

The subsidies do not address the interests and problems of growers who make up the lion's share of the state's agricultural output, which of course has led to hot debates and ill-will among farmers. It will not take long for lawmakers to recognize that the farm subsidies sent to the state are not spent with the best interests of farmers in mind; curtailing the expenditure might just be an easy way to save federal funds over the next decade. This might affect approximately 125 farmers, who are considered the top 1 percent of subsidy recipients, and -- by extension -- the employees laboring for these growers. Since a new farm bill is just about ready to be discussed in 2012, it is anyone's guess how the lobbying and allocating of funds will go.

* Another group making its voice heard is the California Hospital Association. "Funding reductions for hospital services translate into decreased access for our nation's seniors," said American Hospital Association President Rich Umbdenstock to Health Leaders Media. These anticipated cuts would occur if the committee takes a closer than just cursory look at the Medicare system.

This dire prediction comes hot on the heels of Gov. Brown's decision to veto AB 96, which -- as previously outlined on Yahoo! News -- was designed to prevent 37,000 seniors and disabled residents from having to rely on institutionalization. While these cuts might still be somewhat in the future, they could spell disaster when coupled with the state's budget-mandated Medi-Cal cuts.

It is clear that California has a lot to worry about when it comes to the makeup of the committee that will ultimately oversee the allocation of the debt ceiling spending cuts. The only hope for those worried about cuts would be the inclusion of very liberal players, but -- as already pointed out by McClatchy Newspapers -- Sen. Feinstein and House Minority Leader Nancy Pelosi are unlikely to seek appointment.

Who will carry the torch for California?