Local Governments Worry About Going Over Fiscal Cliff
11/08/12 5:58PM By Kirk Carapezza
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Tax rates and payroll taxes will go up and federal spending cuts will take effect if Congress and the White House don't move to avert what's known in Washington as a "fiscal cliff."
Cities and towns in Vermont say Washington needs to deal with the issue quickly because it could hurt their budgets and lead to another recession.
Municipal leaders are worried the fiscal cliff could undermine the hard-earned economic recovery unless Congress acts before the new year.
"I hope so, because the clock is ticking," says Barre Mayor Thom Lauzon. Otherwise, the Republican mayor says constituents in his city and elsewhere would take a big hit.
"You simply can't carve $560 billion out of the United States economy and expect it to emerge unscathed," Lauzon says. "It's going to plunge this country into a pretty serious recession."
Across the board, federal spending cuts could cripple local budgets. With so much partisanship in Washington, Lauzon says congressional leaders need to move to the middle.
"We do need to adjust tax rates in this country and we do need to control our spending," he says.
That message is being heard across the aisle, says Senator Patrick Leahy. The senator says there's a new sense of urgency to address the looming fiscal cliff - and to help Vermonters trying to get back on their feet.
"Here we're coming out of the recession! We're showing improvements," Leahy says. "We've got to get away from slogans and symbolism and get to substance. And that's going to be difficult."
Difficult, but Leahy says it can be done under President Obama's renewed leadership.
Burlington's Democratic mayor Miro Weinberger says it's hard to overstate how important this presidential election was for a city like his, "even if you look just narrowly at financial issues in the years ahead, which are terribly important in a city that has limited local resources and that is still coming through the recession."
Weinberger says President Obama knows how cities operate and he thinks he'll successfully negotiate with congressional Republican leaders on a major deficit reduction deal to avert fiscal crisis.
"He understands the pressures mayors are under, and he understands how federal policy will make our cities healthier - or less healthy," Weinberger says.
Weinberger points to a proposal to build new roads and a new neighborhood in Burlington's South End, which, he says, won't be possible if Congress forces the economy over the fiscal cliff.
There's not much time, though. Congress has less than two months to get something done.