Governors brace for inevitable cuts to states as debt debate rages on

If the federal debt limit is not raised, several governors said as they gathered here on Friday for the semiannual meeting of the National Governors Association, the ensuing default will harm the economy, make it difficult for states to borrow money and delay some of the vital federal payments that states count on for everything from Medicaid to unemployment benefits.

Governors from around the country — including Christine O. Gregoire of Washington, a Democrat, and Scott Walker of Wisconsin, a Republican — said that employers in their states had been reluctant to hire new workers because of the uncertainty. And Gov. Lincoln Chafee of Rhode Island, an Independent, said that the threat of dwindling federal aid gave him pause last week before he signed a bill in which his state agreed to pay for heating assistance for the poor that the federal government was expected to cut.

“My argument — and I did sign it — was that this was the first of many,” he said. “I don’t know how much Rhode Island taxpayers can do that.”