States Brace as Supercommittee Targets $500 Billion in Aid

In statehouses across the U.S., a budget-cutting congressional supercommittee and the sputtering economy threaten a fledgling recovery from the worst fiscal crisis in more than 70 years.

Stalled job growth, eroding consumer confidence and a stock market that has lost more than $2 trillion since April may cut into tax collections that have yet to fully rebound from the recession. At the same time, Washington policy makers are moving to slash federal spending, a potential threat to dozens of programs -- from Medicaid and school-lunch subsidies to defense contracts and law-enforcement grants -- that nourish state budgets and local economies.