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What is the Fiscal Cliff?

The Fiscal Cliff and what it means to hardworking Americans.

Unless Congress acts by January 1, 2013 the federal government will automatically increase taxes and decrease budgetary expenses.  This action will reduce the deficit, but unless it is done thoughtfully it will have potentially negative impacts upon the economy and could push the country back into recession. 

The first component of the Fiscal Cliff is increasing revenue for the Federal Government.  This revenue will come from the expiration of almost every tax reduction since 2001, the largest of which are the Bush-era tax cuts and the two-year temporary Payroll tax cut.  

The Numbers: 

On January 1st, 21.7 million households will see an average tax increase of $3,446. The average federal tax rate, including new taxes for the Affordable Care Act (ACA), would rise by 5% for all Americans.   Additionally, extended unemployment benefits will expire, the marriage penalty tax returns and the child tax credit will be cut in half from $1000 to $500.

 

As if these tax increases weren’t enough, there’s a second component of the Fiscal Cliff – sequestration.

The tax increases will be coupled with dramatic spending cuts, often referred to as sequestration.  Sequestration will result in over $1 trillion of cuts over nine years or annual cuts of $110 billion to domestic programs including Medicare and national defense.

The problem with sequestration is not necessarily the decrease in government expenditures, but howthe cuts are administered.  Implementation of sequestration is incredibly complex and the rules are often unclear or impractical. These factors, paired with an abrupt timeline for implementation, will not allow for effective management and will likely adversely impact the economy. The Bipartisan Policy Center estimates that the annual reduction in expenses is expected to slow GDP growth by half a percentage point and will cost more than $1 million jobs over a two-year period.  

As our country struggles to emerge from recession, it cannot afford indiscriminate cuts in spending and significant increases in taxes. Moving forward, we need leaders in Congress who are willing to work towards a sustainable bi-partisan budget solution.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Nancy Wride (Editor) November 03, 2012 at 08:38 PM
Here is the comment box, folks. :D
John B. Greet November 03, 2012 at 11:59 PM
I understand that some commenters here disagree with DeLong's positions, but allowing them to post pictures of a toy rodent with DeLong's name on it, or other false imagery -on a piece that DeLong has written and submitted for folks to review and comment upon- hardly seems conducive to civil or fact-based political discourse.
Mike Ruehle November 04, 2012 at 12:10 AM
This blog is intended to scare people. DeLong has no skin in the game. It's easy for him to sit back and point out what has gone wrong IN THE PAST and the terrible things coming down the tube. Anyone who can read can do that. Nowhere does DeLong state what specific actions he will take if elected to mitigate some of the anticipated problems HE POINTS OUT? DeLong is the armchair quarterback who never makes a mistake and can tell you all the things his opponent did wrong after the game is over. And if DeLong does state his opinion before the game starts and the opionion turns out to be wrong, DeLong then flip-flops his position like he did on global warming and SB 1243.
John B. Greet November 04, 2012 at 01:12 AM
None of the facts presented here are inaccurate. DeLong has explained the situation and cited his sources. If people are frightened by this information, perhaps there is good reason that they should be. Or, if not frightened, at the very lease extremely concerned. Still DeLong's last paragraph does not seem to intended to evoke fear but, rather, suggest that positive outcomes are possible going forward. I find that approach rather refreshing. Ruehle is correct that DeLong does not appear to have offered any specific solutions here. This does not appear to be DeLong's purpose since he makes it very clear that he feels that "leaders in Congress" must be "willing to work towards a sustainable bi-partisan budget solution." This would seem to entail working with others, and not presuming to either have all of the answers or to impose any answers upon others. I find that approach refreshing as well!
Renita Aguilar November 04, 2012 at 02:07 AM
DeLong is going to lose on Tuesday and when we analyze why that happened it may very well be for the reasons that Mike mentions above. DeLong is very good at outlining his priorities (deficit reduction, bolstering education, reforming Obamacare, and so on). But he offers almost zero specifics. He never states precisely what should be cut, how to grow revenues, how to create jobs (cutting regulations and bureaucratic red tape is hardly specific). He even refuses to take public positions on the State ballot initiatives. As a way to deflect the total lack of substantive policy discussion he has thrown the kitchen sink at Lowenthal. the bunker fuel tax bill that he himself has supported, attempting to take credit for the Colorado Lagoon and Port environmental cleanup efforts while shockingly saying Lowenthal's environmental policies have led to worse air and water conditions, and so on. I won't even go into the city email database matter or the tracker matter - let's leave those off the table for now. He has further made zero accounting for his work in the 3rd District. John I think your defense of DeLong is admirable to a degree; you clearly identify with conservative politicians and have an independent (nearly libertarian) view of small government and greater personal responsibility - a respectable position. But DeLong's campaign itself has failed you.
John B. Greet November 04, 2012 at 02:28 AM
Thanks, Renita. I think there is plenty that could be said in opposition to Lowenthal's overall record (in our City Council and our State Assembly and Senate) as well but even had his record been stellar (which it has not) the mere fact that he recently voted -twice- for a State Assembly Bill that would have prohibited all local law enforcement agencies in the State from fully cooperating with federal immigration authorities would prevent me from ever voting for Lowenthal...for any office. http://belmontshore.patch.com/blog_posts/sen-lowenthals-illegal-immigration-problem With about one in every four of the nation's illegal immigrants residing in California, this is one of this State's most pressing challenges and it is a challenge that relates to and exacerbates every *other* challenge we face. It disturbs me *greatly* that when Lowenthal voted -twice- in support of that Bill, he either was not aware that our State's Penal Code mandates full cooperation by local law enforcement with federal immigration authorities, or he simply didn't care. Either way, in my opinion, he could not have been more wrong or misguided to have voted as he did. In any case, time, and Tuesday, will tell the tale one way or another. May the best and most conservative candidate win! ; )
Mike Ruehle November 04, 2012 at 08:50 PM
How is DeLong's name associated with a rodent NOT appropriate or conductive to fact-based discourse? I suspect MANY people have named their pet rodent after DeLong. How is that NOT a compliment to DeLong. I know if I had a pet rodent, it would only be fitting to name it DeLong.
John B. Greet November 04, 2012 at 09:42 PM
Nevermind, Ruehle. It seems the pictures you saw fit to append to someone else's article have now been removed. I'm glad. Like so many other things you post, they were neither constructive nor conducive to civil or fact-based political discourse.
Watts November 05, 2012 at 01:57 AM
It is like his ad about kicking the can: http://www.youtube.com/watch?v=EvqOuHfZs_I I am not even going to get into how unoriginal the concept of the ad is, but where is the substance? Any substance? That has to be one of the worst ads that I have ever seen. If anybody saw that ad and it was the deciding factor that they used to support Delong, they need their head examined. That ad is almost goofy, as far as how little it says.
Nancy Wride (Editor) November 05, 2012 at 02:09 AM
For future reference to any bloggers or if there is a lack of a comment box, another blogger pointed out that there is a choice for whether you the blogger want to allow comments or not, and that may have accidentally been checked by Gary or his staff. I can assure you I had nothing to do with it nor would notice so always feel free to flag me, readers. :D
John B. Greet November 05, 2012 at 02:16 AM
Not too dissimilar, to my mind, from Lowenthal's campaign claim of "bringing tens of thousands of jobs to our community and improving our roads, bridges, and public buildings." Which community? What jobs? The projects he lists that he claims to have championed are all government projects. What has he done, specifically, to stimulate job growth in the private sector? In your own words: "...where is the substance? Any substance?"
Mike Ruehle November 06, 2012 at 11:32 AM
This blog is similar to the campaign mailer DeLong sent to Vietnamese homes claiming Lowenthal supports communisim. "Gary DeLong reveals himself to be just another thug, trying to con people by stoking their fears so that he can pick their pockets." http://www.orangejuiceblog.com/2012/10/gary-delong-denies-being-a-climate-denier-but-embraces-his-inner-mccarthyite/

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