Could this red-white-and-blue weekend augur red ink for Virginia?
Default by the federal government, unless the debt ceiling is raised by Aug. 2, has potentially devastating effects for state government.
The flow of dollars from Washington to Virginia — No. 1 in federal spending per capita — would slow to a trickle. Federal workers wouldn’t be paid, driving up unemployment and choking off income-tax revenue. Medicaid, the federally financed, state-managed health-care program for the poor that is Virginia’s fastest-growing expense, would go begging.
To keep the budget in balance as required by law, Gov. Bob McDonnell would have to start cutting.
Also, transportation dollars would evaporate, potentially slamming the brakes on a defining feature of McDonnell’s just-passed road-building program: debt. He is planning to issue $1 billion in bonds backed by an anticipated federal handout.