‘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.”



COMMENTS

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This article is missing the “why?” part of the whole fiscal cliff narrative. The only reason why we’re facing the cliff is that Republicans threatened to let America default on its debt obligations otherwise.

Not Freida Cook.  Am relative (Ltpar)

Andrew, clearly you are a Democrat who continues to have his head buried in the sand? The reason we are in this mess to begin with is because of the continued deficit spending by both Republicans and Democrats in Congress. There is enough blame to go around, but only the Republicans want to slow the process, but still not solve it.  Perhaps going over the cliff will be the final straw that breaks the camel’s back, the country goes belly up and then we can start over from scratch.  Won’t be a pretty picture, but we have been headed in this direction for a long time.

The way I see it, the Dems want to climb higher up the cliff before jumping off while the Repubs want to just see how close to the edge we can stay on the way back down. The leadership on neither side has a plan to really back away from the cliff. Neither side really wants to cut the spending and government back to Constitutional levels! I wonder if there is a ‘David’ out there that would stand up and say ‘I’ll go fight Goliath!?’

Sorry, relative of Freida, but the blame for the sequester lies solely with the Republican party. There’s a difference between lowering our debt and refusing to pay what we owe. Raising the debt ceiling does not add to the debt. It just allows us to pay the money we already owe. Republicans tried to make us default on our obligations and forced us into this mess through their obstinance. If you are unable to recognize that reality then I’m not the one with my head in the sand.

Raising the debt ceiling doesn’t in itself raise the debt but neither does it pay the debt. It DOES allow more debt to be accrued (hence ‘debt ceiling). The payments would have been made either way but other Federal programs and employees would be cut/not be paid. That would not be such a bad thing since the Federal government is significantly larger than the Constitution allows.

Andrew & Bradly, with your math ability I am happy you are not balancing my checkbook every month.  Raising the debt ceiling is like me taking my personal budget and thinking, well it is ok to spend more money even though I do not have sufficient income coming in to cover it.  So what do I do, add it to my credit card (personal national debt) and keep on spending.  Sooner or later, I hit the credit card max and unlike the United States government cannot print new money to pay for it.  While a large chunk of the annual GDP goes toward paying the national debt, the government continues to spend more than they pay, so the national debt continues to grow.  Estimates are that the national debt under Obama’s spending plans will increase a trillion dollars a year for the next four years.  That’s a lot of deficit dollars in anybody’s budget?  The question is how long can the country continue under those terms.  Our credit rating has already been dropped and continued printing of new dollars will one day cause the dollar to be worthless.  When you wake up on that day and can’t use dollars to buy milk, bread or gasoline, you may wish that someone had put the brakes on government spending?

Freida relative, that is what I meant…I must have gotten my mords wixed up! Your example is right on.

Um, no… refusing to raise the debt ceiling is more like trying to get your credit card debt under control by refusing to make any more payments. It’s not going to work out in your favor. But the federal government does not operate the same way as an individual or a family. It can’t. Such analogies are pointless.

Andrew, your logic just doesn’t match the reality of life.  What is pointless is not the analogy of the situation, but rather the continued raising the debt limit and allowing the Federal Government to continue it’s spending binge.  Keep raising the national debt and sooner or later the it will reach the point of crashing the entire system.  When that happens the dollar will be worthless.  Think about what you will do when that happens.

Again, raising the debt ceiling does not increase our debt. It just allows us to pay what we already owe and not enter a disastrous bankruptcy. Republicans apparently think bankruptcy would be a solution to our debt problem. But it would not be. It would be catastrophic. It would be similar to cutting off a leg to lose weight.

Raising the ceiling does not increase debt in itself but it does allow the government to borrow more (increase debt) to keep paying the debt…kind of a big circle and NOT a good policy. It IS like maxing out a credit card and taking out another to pay the interest. It just increases debt.

No, raising the debt ceiling does not allow us to borrow more. It just doesn’t. The only thing it does is keep us from defaulting on the debt we already owe. That’s it.

*Stunned shaking of head*

I know, Bradley. It’s complicated.

Not Freida Cook:  Am a relative (Ltpar)

Andrew, it’s not complicated at all.  To meet current and future projected Federal Budgets, inlcluding interest payments on the National Debt, the Obama Administration is spending approximately 1 Trillion dollars more per year than it has in revenue coming in.  That 1 Trillion dollars is borrowed money and goes right on top of the soon to be 16 Trillion National Debt.  If Congress refused to raise the debt ceiling, there would be no automatic default and the interest on the National Debt would still be paid.  However, there would have to be 1 Trillion dollars in cuts to government programs. That is why the debt ceiling must be raised and most importantly because Congress doesn’t want to stop spending.

That debt is going to increase regardless of whether or not we raise the debt ceiling. Raising it doesn’t give the debt permission to increase. It doesn’t need permission. It’s going up. That’s it. The only question is whether or not we pay what we owe.

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