Governors warn Congress over debt limit

WASHINGTON (AP) — Governors warned Congress Wednesday that lingering uncertainty over raising the nation's borrowing capacity could hinder their budgets and their ability to foster job growth in their states.

Delaware Gov. Jack Markell and Oklahoma Gov. Mary Fallin outlined state agendas in 2013 as part of the National Governors Association, urging lawmakers to reach a deal on the debt ceiling, which will reach its limit in about two months.

Markell says the postponing of spending cuts under the fiscal cliff deal and a lack of action on raising the debt limit has led to uncertainty just as states are rebounding from the recession and developing their spending plans for next year. He said if the debt limit isn't increased soon, there will be disruptions in federal spending and capital markets that could hurt states.

"Our economies are tightly linked to the national economy and as a result our states' prosperity depends — the prosperity of our citizens depend in no small measure — on ability of public servants in Washington to come to terms on a path forward," said Markell, who is chairman of the NGA.

Fallin, a Republican, said deficit reduction shouldn't be accomplished by simply shifting costs to states. She said the federal government should give states more flexibility to tailor federal programs and funding to the needs of their states.

"What we don't need are 'one-size-fits-all' solutions or more unfunded federal mandates passed onto our states," said Fallin, the NGA's vice chair. She said states should be treated as "partners, not underlings."

The concerns in the states arise as Treasury officials say they'll run out of money to pay all the government's obligations sometime in February or March if Congress doesn't raise the current $16.4 trillion limit on borrowing authority.

Republicans have said they will seek major spending cuts in exchange for any agreement to raise the debt limit. President Barack Obama has said he won't negotiate on the debt limit, raising concerns of a protracted standoff.