In latest forecast, commerce department says reductions in state and local government spending are holding back recovery

For the last 24 years James Estep has worked in public education. He has never seen anything like this. The superintendent of Pennsylvania's Mifflin county school district is wrestling with a multimillion deficit that last year led to him cutting 83 jobs – a fifth of his workforce – and closing a high school and three elementary schools. This year he says there's more to come. "I don't see the end of this," he says.

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