Fiscal cliff threatens all Californians

Who should worry about the looming package of automatic tax hikes and spending cuts that will hit this nation if Congress cannot come to a deal to avoid what has come to be known as the “fiscal cliff?”


Calif. Assemblyman Bob Blumenfield (D – San Fernando Valley) said the numbers of Californians who would lose access to particular services – the 12,000 children who would lose access to Head Start programs or the 2,000 women who would not be screened for breast and cervical cancers – only begin to hint at the potential fallout.

“It’s also important to talk about pure economics,” Blumenfield said in an interview on Dec. 17, two weeks before the Dec. 31 deadline by which a deal must be reached. “Everybody understands that we are in a very fragile time right now. We still have double-digit unemployment.”

As chair of the California Assembly budget committee, Blumenfield has spent the last two years hammering the state’s spending plan into balance. “We’re looking at only a $1.9 billion deficit,” Blumenfield said, a marked improvement over previous years, when the state was facing projected deficits of more than $20 billion.

“We’ve been doing our part on the state level to get the state’s financial house in order,” Blumenfield said, but if leaders in Washington, D.C., can’t agree on a plan to reduce the deficit by $1.2 trillion by the end of the year, Blumenfield and his colleagues in Sacramento could be having very different kinds of conversations in January, staring at a hole where $4.5 billion dollars of federal funds used to be.

And though the impact of cuts in spending would most directly affect the beneficiaries of social service programs, the hurt wouldn’t end there, Blumenfield said. Retailers, who’ve lately been buoyed by an increased level of confidence among consumers, would likely customers flee the stores and put away their wallets. Foreclosures could go up. California – indeed the country as a whole – could go back into recession.

“Even if you don’t see how you’re benefiting from a particular state or federal program,” Blumenfield said, “everybody is affected by the ups and downs of the economy.”