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If U.S. Defaults, N.M. May Take Financial Hit

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If U.S. Defaults, N.M. May Take Financial Hit


If U.S. Defaults, N.M. May Take Financial Hit

If U.S. Defaults, N.M. May Take Financial Hit

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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No matter how the national debt ceiling debate gets resolved, state governments are going to take a financial hit. New Mexico is one of five states expected to be hit the hardest. Michele Norris speaks with New Mexico State Treasurer James B. Lewis about how his state is preparing for a possible government default.

MICHELE NORRIS, host: No matter how the debt ceiling debate gets resolved, states are expecting to take a financial hit and five of them face a particularly worrisome risk. The economies of Maryland, Virginia, South Carolina, Tennessee and New Mexico are closely tied to the federal government. So if the U.S. gets downgraded and loses its triple-A rating, the same is likely to happen to those five states. And we're going to hear from one of them now. James B. Lewis is the treasurer of New Mexico.

He's a Democrat and he joins us from the State House in Sante Fe. Mr. Lewis, welcome to the program.

JAMES B. LEWIS: Well, thank you for having us and good afternoon. I just came from a legislative committee. They're talking about some of the issues we're gonna talk about today.

NORRIS: How worried are people there about this?

LEWIS: Basically, you know, our concern is we're walking in untreaded waters. We are very concerned because we just don't know what will happen if they don't lift the debt ceiling.

NORRIS: Can you give us a sort of basic framework on what New Mexico gets from the federal government? Could you just tick through some of those things for us?

LEWIS: Yes. What we do is we get about $500 million a month. And one of the big problems that we have is that New Mexico, when we look at hospital and health care, some of that's about 78 percent. And we look at education and transportation, that's probably another 20 percent, so those - there's probably somewhere in the neighborhood of almost 6 billion, really right at 5.4 billion a year that we get from the federal government.

NORRIS: And you have a large Air Force base there also. Would that affect it?

LEWIS: We also have Kirtland Air Force Base. We have the Sandia National Laboratories. We have the U.S. Forest Service. We have Bureau of Land Management. We have 22 different tribes here that receive quite a bit of money from the federal government and then we have the other big national laboratory here, the Los Alamos National Lab.

NORRIS: How is this going to potentially impact the citizens of New Mexico? Beyond the big expenditures, are there other things that might be a bit surprising, services or other things that get federal funding through matching funds or block grants or...

LEWIS: Yeah, there is a tremendous amount of matching funds. As we indicated, transportation could be impacted by it. We have unemployment insurance with the federal government. We have an inordinate number of veterans in this state and people are calling us asking, you know, what will happen if they're not going to get their check from the federal government. So if individuals are not getting their checks, we got to be concerned about people being able to pay their mortgage, being able to pay their rent, being able to have food on the table, being able to buy gas for transportation.

So all of these areas could be impacted with what's going to happen with the federal government.

NORRIS: Are you angry about the position you find yourself in right now? And if you are, who are you angry at?

LEWIS: Well, I'm angry from the perspective that actually I have been asked to run for the open Senate seat that we have here, been asked to run for the open House seat that we have here. But I have decided that that is not something - I think we have a dysfunctional government right now. And I've just said that - no mas, no mas. So...

NORRIS: I want to make sure I understand you. You're saying that this whole thing has been so distasteful that even though they're courting you to run for either a House or a Senate seat that you have no interest in that.

LEWIS: I have no interest as this point. My concern is I don't want to be a part of what's going on in Washington today.

NORRIS: James Lewis, thank you very much for your time.

LEWIS: Thank you. And I want to thank all your listeners and thank you for the interview.

NORRIS: Thank you. All the best to you.

LEWIS: Okay, bye-bye.

NORRIS: That's James B. Lewis. He's the state treasurer for New Mexico.

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