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Backup plan is wise move

LAST UPDATED: 2:22 p.m. HST, Aug 5, 2011

Hawaii often feels cut off from the political machinations of Washington, D.C. — indeed, the entire country may feel estranged from the current debt-ceiling fracas. But now it's more important than ever to seize some measure of control, however small, from the looming threat of financial chaos.

Gov. Neil Abercrombie has acted appropriately by giving the public reassurance that in Hawaii contingency plans are being made in the event of a national default on America's debt, should frenzied negotiations fail to achieve a pact to raise the federal debt ceiling.

On Thursday, the governor assembled department heads and financial- sector executives to plan how the state can continue its essential business without disruption.

Ordinarily, state programs that rely on federal funds operate on a reimbursement basis: The state covers costs up front and then is repaid by the federal government. But if there is a default, the federal government will pay bills according to a priority plan that hasn't been discussed publicly, so for many programs, the cash won't be forthcoming.

To cope with that uncertainty, state Budget Director Kalbert Young said the state has adopted a "cash conservation" strategy, first assessing what allotments could be fronted in-house. Other liabilities could be paid through loans from local banks, according to a release from the governor's office.

"We have a sound plan and are prepared to keep our economy stable," Abercrombie said in that prepared announcement. "We are carefully managing the state's finances and our local banks are ready to step forward if the need arises."

This is good to hear — in fact, it's crucial that the public receive a calming message in the midst of alarming news from Capitol Hill. There, it seems inevitable that the political polarization has left both extremes deficient of the votes for a deal that can pass both chambers, and yet some kind of bipartisan accord will be needed to avert a default after Tuesday, when federal coffers have been projected to run dry.

The exact contours of that political middle ground are unknown, and Hawaii's congressional delegation can't yet commit to a final position. However, freshman U.S. Rep. Colleen Hanabusa on Wednesday did venture a comment on Abercrombie's contingency planning, questioning the wisdom of announcing it publicly.

What she's missing is that greater insecurity would have resulted had Abercrombie given the public the silent treatment. Right now it's more comforting for Hawaii citizens to know the rough outlines of the contingency plan than to be left uninformed.

Ignorance can be bliss, but not in these circumstances. Hawaii residents need the confidence that leaders here are setting up the means to get through potentially rough seas, and the administration has been saying the right things.

That's more than anyone can say about the noise coming from the nation's capital for the past few excruciating weeks.

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