Fiscal cliff will roil state budgets
November 15th, 2012
05:23 PM ET
1 year ago

Fiscal cliff will roil state budgets

NEW YORK (CNNMoney) – States would see massive cuts in federal spending should the nation fall over the fiscal cliff, according to a new report. But they could also see their tax revenue jump as federal tax rates rise.

The fiscal cliff is a combination of expiring tax policies and federal spending cuts that are set to take effect in January. President Obama and lawmakers are now scurrying to come up with a plan to avoid this scenario, which the Congressional Budget Office projects would push unemployment above 9% by the end of 2013 and shave 0.5% off the nation's economy.

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Filed under: Fiscal Cliff
soundoff (8 Responses)
  1. Becker

    If the fiscal cliff hits so be it. At this point it may be better in the long run to take the hit all at once. Those rich people are not going to be ones that get hurt – remember they have money and have been planning for this for the last year. Thats why they are rich.

    November 15, 2012 05:39 pm at 5:39 pm |
  2. Larry in Houston

    to be perfectly honest – the people that makes less than 150 K per yr , don't really care – from what I hear, they are saying : Let IT GO – I hope obama calls Boehners bluff. The Middle Class was the one's that turned OUT for our President. There are waaay More people (voters) in this country that makes Less Than 150 K – than people who makes More than 250 K

    November 15, 2012 05:51 pm at 5:51 pm |
  3. myviewis

    Let the fiscal cliff happen. People are used to unemployment at 9% anyways.

    The article does state that on the flip side..... "$393 billion in federal tax increases, including the elimination of the Bush tax cuts, take effect. So if this is true then eliminate the Bush tax cuts, increase taxes on small businesses. The worst that will happen is that small businesses will eliminate employees to make up for the loss of the Bush tax cuts and the increase in taxes.

    November 15, 2012 06:04 pm at 6:04 pm |
  4. Larry in Houston

    to be perfectly honest – the people that makes less than 150 K per yr , don't really care – from what I hear, they are saying : Let IT GO – I hope obama calls Boehners bluff. The Middle Class was the one's that turned OUT for our President. There are waaay More people (voters) in this country that makes Less Than 150 K – than people who makes More than 250 K

    November 15, 2012 06:13 pm at 6:13 pm |
  5. GonzoinHouston

    Nothing like a good game of political chicken to liven up the holidays! It all comes down to this: extending the Bush tax cuts for the top 2%. Everything else is negotiable. In 2010 we hit a similar but not as severe situation. The GOP rejected tax cuts for 98% of the population unless the top 2$ got theirs. When the Democrats offered the 2%, they got an extension on the payroll tax cut, the unemployment benefits, and a repeal of DADT. That's what it was worth in 2010. This time around the democrats have a stronger hand, and Obama is really focused on this one. Keep the popcorn handy!

    November 15, 2012 06:13 pm at 6:13 pm |
  6. CBP

    It seems to be cleat to everyone except the House of Representatives that there will be huge consequences if our fiscal house is not put in order. Speaker Boehner needs to move more quickly and needs to work out some compromises to avert this crisis. This is a matter that needs to be worked out now. People need to know what their financial situation will be starting in January before they make expenditures for gifts for Christmas. If families do not spend money then stores both large and small will be hurt. They are counting on a this spending to make them solvent. Obviously Mr. Boehner and his deputies are not feeling this urgency. If they were there would be meetings to solve the crisis. Speaker Boehner's reputation will hang on the solution to the crisis. If it is not a good one then his term as Speaker will go down in history as one of the worst. IF he helps to solve it then he will be viewed in a more positive light.

    November 15, 2012 07:11 pm at 7:11 pm |
  7. Squigman

    If it hits, the presiding congressional majority better save like they've never saved before. The next election may find a few of these derelicts unemployed the day after the election.

    November 15, 2012 07:38 pm at 7:38 pm |
  8. Let's Move Forward

    I guess some of the states will get their wish no federal money means the federal government out of their lives.

    November 15, 2012 07:40 pm at 7:40 pm |