The Center on Budget and Policy Priorities released an update to their analysis last week, which now shows more than half of the states are facing a budget crunch in 2009. As we've commented, this isn't good news, as state budgets are far less flexible than the federal budget and usually are legally prohibited from running a deficit. From the CBPP update: More than half of states anticipate budget problems, according to this updated analysis of state fiscal conditions.

• 19 states now project budget gaps for 2009. New Hampshire, Ohio and Wisconsin have joined this list since our last update
• The combined budget shortfall for these 19 states in 2009 is now at least $32 billion.
• 6 states now say they will have 2009 deficits, but have released no further information.
• 3 other states project budget gaps for 2010 and beyond.

CBPP: 19 STATES FACE TOTAL BUDGET SHORTFALL OF AT LEAST $32 BILLION IN 2009

The Senate Finance Committee is considering new rules on Wednesday (Jan. 30) to increase transparency of the committee's meetings. While the proposed changes are a welcome step toward openness and transparency, the draft rules contain several serious problems. We need to give the committee quick feedback on these problems and get them fixed before Wednesday's markup. Most notable are the following three problems:

Bigger Bang for Bigger Bucks, but Un-Paid For The Senate is expected to add approximately $20 billion in new provisions to the $146 billion stimulus package agreed to last week by House leaders and Treasury. Two of these provisions will probably be added in a Finance Committee mark-up on Wednesday afternoon; another may be added by the Agriculture Committee in the next couple of days. Additional amendments may come when the package comes to the floor before a final vote as soon as Thursday or by the middle of next week. As of now, the major items likely to be added in the Senate are:

Another unbelievable story on contracting in the Washington Post this morning. Walter Pincus reports that government officials (including Jack Bell, deputy undersecretary of defense for logistics and materiel readiness, Stuart W. Bowen Jr., special inspector general for Iraq reconstruction, and William M. Solis, director of defense capabilities and management for the Government Accountability Office) testified before Congress that the Bush administration is unable to manage the enormous number of U.S. contractors currently working in Iraq and Afghanistan. At the end of September, there were over 196,000 contractor workers assisting the Department of Defense in the two war zones, and Defense Undersecretary Jack Bell stated that despite the crucial role these contractors play in the war effort, the Defense Department was "not adequately prepared to address this unprecedented scale of our dependence on contractors." The GAO also found not enough trained service personnel are available to handle outsourcing to contractors in the wars, a finding supported by Retired Army Gen. David M. Maddox, who has studied the contracting effort in Iraq as a member of an Army-appointed commission. This testimony was delivered at a joint hearing of two subcommittees of the Senate Homeland Security and Governmental Affairs committee yestereday afternoon. And it is more than simply related to ensuring efficient management of the war effort - there's a lot of money involved here too. Subcommittee Chairman Tom Carper (D-DE) noted in a statement: Out of $57 billion worth of contracts for services and reconstruction work in Iraq, the Defense Contract Audit Agency has reported that more than $10 billion — or one-sixth of the total spent on contracts — is either questionable or cannot be supported because of a lack of contractor information needed to assess costs. To date, there are more than 80 separate criminal investigations into contracts totaling more than $5 billion. Here's a link to the committee page for the hearing where this testimony was heard, but it really won't do you much good as it doesn't have any testimony or information about the hearing other than who testified. Image by Flickr user jamesdale10 used under a Creative Commons license