Lancaster County Residents Discuss ‘Fiscal Cliff’

Lancaster Intelligencer Journal

With the clock ticking on how to keep the country from plunging over the so-called fiscal cliff, U.S. Rep. Joe Pitts says now is the time to come together and negotiate.

While many people are weighing in on the fiscal crisis, Pitts is the only local leader with the ability to do something about it.

“If we can get serious, stop campaigning and start negotiating, I think we can work this out by the end of the year,” the Republican lawmaker said in an email Friday.

The fiscal cliff refers to more than $500 billion in tax increases and across-the-board spending cuts scheduled to take effect after Jan. 1 — unless President Barack Obama and Republicans reach an alternative deficit-reduction deal.

If the two sides don’t agree on a deal by the end of the year, taxes would rise for nearly every taxpayer and many businesses. Financing for most federal programs — military and domestic — would be cut.

While these measures would reduce the national deficit, many economists say these new taxes and spending cuts would be too much deficit reduction, too suddenly, for the weak economy.

The Democratic-controlled Senate signed off on legislation that would keep the measures from kicking in, but now it’s up to the Republican-controlled House.

Pitts and other House conservatives prefer holding out for major structural changes to the tax code and entitlement programs such as Social Security and Medicare.

“Critical programs like Social Security and Medicare are projected to consume all federal revenue in the coming decades; without reform, these programs will not be there for future retirees,” Pitts said. “The sooner we fix the problems, the less pain there will be on everyone.”

On the other side of the aisle, Democrats have warned that entitlement reform is off the bargaining table. Democrats also say they’ll refuse to look at GOP calls to dramatically slash Medicaid.

Democrats argue the most pressing issue is making sure the Bush-era tax cuts don’t expire for middle class Americans, but do end for those making $250,000 or more.

The nonpartisan Congressional Budget Office and Tax Policy Center estimate that taxes for most families would rise by at least $2,000 if the cuts aren’t extended.

Republicans have so far refused to separate the middle-class tax cuts from those benefiting wealthy Americans.

“We have a spending problem, not a tax problem,” Pitts said.

Sally Lyall, chairwoman of the Lancaster County Democratic Committee, said that Pitts and other House Republicans should consider the outcome of the recent presidential election in their negotiations.

“I think that in every speech (Obama) gave, he made a point of saying that the wealthiest 2 percent need to pay more — the American people heard that, and they voted,” she said.

Raising taxes on those who make more than $250,000 remains a popular approach to dealing with the country’s budgetary woes, according to a recent Washington Post-ABC News poll.

Sixty percent of all Americans endorse higher taxes on higher incomes, according to the poll. Last month, an identical 60 percent of voters in the presidential election said that income taxes should be raised on incomes over $250,000, according to a national exit poll.

Some county residents find themselves somewhere in the middle.

“It’s easy for people not making that much money to be in favor of taxes for the wealthy, but higher taxes for the middle class could be disastrous,” city resident Jesse O’Hara said, adding that the tax increase would greatly impact his family.

Afton Sterling said lawmakers should first cut wasteful spending on entitlement programs before raising taxes on any American.

“There is a ton of overspending going on that the average citizen doesn’t know about — that should be our first concern,” the Columbia resident said.

Lamar Lehman, also of Columbia, disagrees.

“We can’t cut back too much on the programs that help the elderly and poor,” he said. “Those who make more money and have the means should be willing to step up.”

Lancaster County controller and recently elected state representative Keith Greiner said he’s not yet sure how the debate in Washington will affect local residents.

“This could easily have a trickle-down effect,” he said. “I can’t really say what would happen if we go over the fiscal cliff, but it could create serious problems.”

Political scientist G. Terry Madonna, who heads Franklin & Marshall College’s Center for Politics and Public Affairs, said a deal most likely will be reached just before the Jan. 1 deadline.

“Right now, there is a tremendous amount of posturing going on,” he said. “I doubt they will get a deal done anytime soon. It will take a long time to agree on all the details and get people to sign on the dotted line.”

Madonna said that if a compromise isn’t struck in time, the economic and political ramifications could be devastating.

“We need to find a way to deal with entitlement spending now, rather than kick the issue down the road,” he said. “If we don’t get a handle on it, 10 years from now we’ll be in a very bad place.”

Antonio Callari, chairman of the economics department and director of the Local Economy Center at Franklin & Marshall College, said neither party is willing to address the real problem.

“There is a lot of hype around the fiscal cliff — it’s more of a political issue than an economic issue,” he said. “If the issue isn’t resolved come Jan. 1, I I don’t think the effects are going to be as bad as some people are making it out to be.”

Callari said the national deficit will continue to grow until Democrats and Republicans agree to put party politics aside.

“The cost of some of these programs needs to be dealt with, but we must remember that they play a very big part in the lives of most Americans,” he said.

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