‘Fiscal cliff’ eyed in region

With Washington, D.C., in budget-brinksmanship mode, Mesa County residents, like the rest of the country, stand to be affected in a variety of ways.

Federal employees, meanwhile, have yet to be advised of the possibility of job reductions or furloughs, as they have been in previous spending standoffs, several officials said.

President Barack Obama and House Speaker John Boehner are jockeying for position as the end-of-year deadline to avoid a “fiscal cliff” approaches.

The “fiscal cliff” refers to a previous agreement between Congress and Obama that a series of spending cuts and tax increases would automatically go into effect in case a budget couldn’t be reached.

The Budget Control Act of 2011 aimed at cutting the federal deficit by $1.2 trillion over 10 years by mandating automatic spending caps.

Among the immediate effects that would be felt by wage earners is the elimination of a Social Security tax holiday that has put about $20 a week into their paychecks instead of the Social Security system.

If the nation goes over the fiscal cliff, it will take that money with it.

The state also would lose what is known as Pittman-Robinson money from federal taxes on sporting goods, which is funneled back to the states to manage fish and wildlife resources.

“That would have a huge economic impact to western Colorado,” said Bonnie Petersen, executive director of Club 20, the Western Slope advocacy group.

The threat to Pittman-Robinson funding is the most immediate worry for her members, Petersen said, noting that she found it “kind of interesting” that no plans were being made by federal officials to deal with possible furloughs or cuts.

“Maybe there’s something in the hopper we don’t know about,” she said.

One group with a powerful stake in the budget talks is the unemployed and a walk over the fiscal cliff would have a “dramatic impact” statewide and in Mesa County, said Sue Tuffin, director of the Mesa County Workforce Center.

Across Colorado, 31,000 people are receiving long-term, or extended, unemployment compensation. A total of 1,032 in Mesa County are receiving the same compensation.

Federal money for those payments would dry up at the end of the year if no deal is reached, Tuffin said.

As of October, 39,000 applicants are receiving unemployment compensation and their benefits will expire in five weeks, she said.

Mesa County’s 1,032 recipients of unemployment compensation is well below the high for the year of 1,553 in February.

“We are at least going in the right direction,” Tuffin said.

The approach of the fiscal cliff has few direct implications for health care, said Steve ErkenBrack, president and CEO of Rocky Mountain Health Plans, but any slowdown in the economy could increase cost shifting and slow the implementation of Obama’s health care law.

It’s important to reach a resolution because “uncertainty is rarely good for a stable health care system,” ErkenBrack said.

House Republicans remain insistent on budget cuts before looking to increase taxes, while Obama is calling for an extension of the current tax structure for all but the nation’s highest earners, households with more than $250,000 in income and individuals with more than $200,000.

Those taxpayers would see their marginal income tax rates increase from 35 percent to 39.6 percent, as well as see increased rates on capital gains and inheritance taxes.

U.S. Rep. Scott Tipton, R-Colo., wants to know where and how additional revenue from higher taxation would be spent, and how it would reduce spending, his office said.

U.S. Sen. Mark Udall, D-Colo., said he was worried that some members of Congress were eager to drive the nation “over the fiscal cliff and back into a recession than work toward a compromise.”

Udall said he would work for a responsible solution to the fiscal cliff and said the issue boils down to “whether Congress has the political courage to choose what’s best for the country over rigid pledges and sacred cows.”

It’s important to give the president and congressional negotiators space, U.S. Sen. Michael Bennet, D-Colo., said through his office, calling the nation’s debt “emblematic of Washington’s dysfunction to people.”


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