On February 1, 2012, the House passed H.R.3567, also known as the the Welfare Integrity Now for Children and Families Act, or what has been dubbed by the media as the "Strip Club Bill". The idea behind the measure is to implement policies to prevent assistance under the Temporary Assistance for Needy Families (TANF) program, often referred to as “welfare” benefits, from being used in strip clubs, casinos, and liquor stores. However, if passed, the implementation of these new regulations would fall entirely on the backs of states.  

A settlement between U.S. states and the nation’s largest mortgage lenders over foreclosure abuses is a go as every state but one—Oklahoma—has signed on to the deal. The settlement is described by U.S. Attorney General Eric Holder as the “largest joint federal-state civil settlement in the history of this nation."  The settlement is between 49 state attorneys general, the Justice Department, the U.S. Department of Housing and five major banks. The total value of the settlement could range from $25 billion to upwards of $39 billion. States with larger numbers of underwater and distressed homeowners will receive a larger chunk of the benefits.

According to CSG calculations of data from the Bureau of Labor Statistics, state government employment began to level off in January, after three straight months of declines. Since the end of the recession in 2009, state governments collectively have seen a net decrease in employment of 137,000. The recession has had an unprecedented effect on state and local government employment as the number of jobs in state and local governments has been trending down since the latter half of 2008. To get back to the pre-recession employment level high of 5,207,000, state governments would have to add a total of 153,000 positions.

The January 2012 report from the Bureau of Labor Statistics shows a lot of positive activity. Job growth was widespread in the private sector in January as total payroll employment grew by 243,000, with big gains in professional and business services, leisure and hospitality, and manufacturing. The unemployment rate continued its decline in January, falling from 8.5 percent to 8.3 percent – the lowest it has been since early 2009.

According to the National Association of State Budget Officers, Medicaid continues to rise as a percentage of total state expenditures, in part to due to the Recovery Act and in part due to increases in both enrollment and overall health care costs. In fiscal 2009, Medicaid represented 21.9 percent of total state expenditures but moved up to 23.6 percent just two years later.