States feel the pinch of tight federal budget

States would be spared draconian cuts next year under President Bush’s plan to balance the federal budget by 2012, but health, social and other programs important to states still would be squeezed.

Only defense and homeland security saw substantial boosts in Bush’s war-time budget proposal, the first he has presented to a Democratic-controlled Congress. His $2.9 trillion blueprint for fiscal 2008 resurrects some failed budget cuts and seeks to wring new savings that will be felt by states, primarily in health-care funding.

Connecting Tags; Medicaid, Medicare, economics, fan-the-flame, copower, prosynergy