President Donald Trump’s plan to cut federal disaster aid could endanger economic growth in hard-hit communities by delaying or preventing their recovery, a recent report by a leading global analytics firm says.
S&P Global Ratings, whose reports are targeted at investors and financial markets, warned of significant financial consequences if Trump shifts the costs of disaster recovery from the federal government to states, counties and municipalities.
Trump’s plan “could have both near- and long-term effects on state and local government credit, including on financial performance, reserves and liquidity, economic growth, and debt and liabilities,” S&P said.
“We could see material credit weakening in the absence of federal support for disaster recovery,” the report added, referring to states and localities that could have their credit ratings lowered due to new financial instability.
