Good morning! Here’s what you need to know:
1. State and local government spending has grown by 65% over the last 10 years. Tax receipts have grown by 32%. Off balance sheet debt of state and local governments equals at least $1.3 trillion. Meredith Whitney argues (again) that a financial crisis awaits for state and local governments.
2. State government budget officials are breathing a bit easier these days, as tax collections have steadily improved over the course of the last year. Michigan, for instance, is actually looking at a surplus. But no one is breaking out the champagne just yet.
3. The Gang of Six US Senators trying to fashion a budget agreement that can win Congressional and Presidential approval is now the Gang of Five. Sen. Tom Coburn (R-OK) withdrew from the “G6.” Pressure is now on Sen. Saxby Chambliss (R-GA) to step up, get a deal done and sell it.
4. Politico profiles the newest breed of government sceptics; Republicans who don’t believe the Obama administration when it says a failure to raise the debt limit will prove catastrophic.
5. American manufacturing is experiencing a revival in the Rust Belt and powering the economic recovery. But the jobs it is generating pay less than they used to.
6. Grain prices keep rising. Persistent rains raised concerns that farmers would not be able to plant as much corn and wheat as they had planned. American farmers are experiencing boom times.
7. GOP “elites” — whoever they are — are beseeching Indiana Governor Mitch Daniels to run for the 2012 GOP presidential nomination, Politico reports. Daniels said yesterday he will make a decision on this shortly.
8. Meanwhile, New Jersey Gov. Chris Christie keeps telling people, over and over again, that he won’t run, to the point that people think that he’s open to the idea.
9. Press coverage of Newt Gingrich’s presidential campaign is nearly hysterical today. Mr. Gingrich apologized to House Budget Committee Chairman Paul Ryan (R-WI) for criticising Rep. Ryan’s Medicare “overhaul” proposal.
10. The Los Angeles Times reports: “In a seemingly major upset in the race to replace former Rep. Jane Harman (D-CA), Republican Craig Huey appears to have captured one of the spots in a July 12 runoff. With all of the election night ballots counted late Tuesday, Huey squeaked past California Secretary of State Debra Bowen, a Democrat, by 206 votes.”
11. Dominique Strauss-Kahn is the almost indispensable head of the International Monetary Fund. If the charges against him are true, he is also a lunatic. Martin Wolf has an important column on the impact of Mr. Strauss-Kahn’s demise on the eurozone.
12. And speaking of important columns, Thomas Friedman has a memo today for Israeli Prime Minister Bibi Netanyahu, telling him to cut a deal on Palestinian statehood or inherit the wind.