Schweitzer: Montana can weather short US default

HELENA — Montana has enough cash in the bank to cushion a temporary delay in federal funding to the states if the debt-ceiling showdown in Congress continues into next week, Gov. Brian Schweitzer said Friday.

The Democratic governor announced Thursday that the state ended the fiscal year with a $340 million surplus, making Montana one of eight states not facing a shortfall.

That cash would allow the state to weather the storm for a month or possibly longer if the government defaults because of gridlock over raising the nation's debt ceiling, Schweitzer said.

"We'll be in trouble just like anybody else after a month or so," Schweitzer said. "But I don't believe Congress will default for a long period of time."

Democrats and Republicans are locked over plans to raise the debt ceiling before Tuesday, when the White House says the federal government will exhaust its ability to borrow and meet all its obligations.

Some states are taking precautionary measures in protect themselves against a government default and a temporary halt to federal funding of education and health care. For example, California this week borrowed $5.4 billion from private investors as a hedge.

But Schweitzer said he doesn't anticipate a prolonged stalemate, and Montana isn't making any additional preparations.

The governor received support for his position from a Republican legislative budget leader who only a few months ago had been at odds with the Schweitzer administration's spending plan for the next two years.

"They may posture and pander and do some political stuff, but I think in the end it won't last very long. They'll come to agreement," House Appropriations Chairman Walter McNutt, of Sidney, said of congressional leaders.

But if they don't, Schweitzer has the ability to order a 5 percent cut in state government spending, McNutt said. If the problem really drags on, a special legislative session might eventually have to be called to look at ways to cut spending further, he said.

"I don't see a lot of legislative will to borrow any money or do anything to fund the entitlement programs," McNutt said.