Translate this page

Economist says San Diego would benefit by sequestration delay relating to fiscal cliff


Monday, December 31st, 2012
Issue 01, Volume 16.


SAN DIEGO - A possible delay in automatic federal spending cuts until at least March would be good news for San Diego's economy, the president of the National University System Institute for Policy Research said today, Dec. 31.

President Barack Obama announced today an agreement was in sight, but not finalized, to end the nation's rush toward the fiscal cliff.

W. Erik Bruvold of the Institute for Policy Research told City News Service, "The most significant thing for San Diego is it sounds like part of the deal is that sequestration will be put off for at least two months,"

Sequestration is a "poison pill" strategy implemented last year to end a fight over raising the nation's debt limit. It calls for billions of dollars of automatic cuts beginning Wednesday, Jan. 2, if U.S. political leaders fail to reach agreement to reduce the nation's deficit spending.

San Diego's political and business leaders have criticized the approaching automatic cuts as being harmful to San Diego's economy because of their impact on the defense budget.

The region is highly dependent on the Pentagon's largesse, which makes up 14 percent of San Diego's gross domestic product, according to Bruvold's institute.

Indirectly, defense spending is involved in one of every four dollars Advertisement
Advertisement for Fallbrook Mattress
[ Fallbrook Mattress ]
created by the region's economy, the institute reported.

Sequestration would also result in higher taxes for individuals and businesses and reduced federal support for other areas of the economy, including health care research by San Diego's extensive biotech industry, community health clinics and Head Start programs.

Bruvold said if agreements are reached now on tax rates, and sequestration is put off for a couple of months, the focus of negotiations between the parties will turn to the "politically challenging" topic of spending cuts.

"In 2013, there will be a lot of conflict and discussion over long-term deficit reduction," Bruvold said. He said the "real money" for reducing U.S. debt is in entitlements, like Social Security and Medicare, which aren't part of sequestration.

The president and leaders of the House and Senate could go right back in crisis mode when a new sequestration date approaches, he said.

The proposed agreement being worked on by Democrat and Republican leaders of the House and Senate, along with the president, would raise taxes on individual annual income of over $400,000 and families that earn more than

$450,000 a year.

The sticky issue of the estate tax has also reportedly been resolved, with a 40 percent rate levied after a $5 million exemption.


 

0 comments


arrow Be the first to share your opinion on this article!
 

Add your Comment


Name

Images, Formatting, or HTML is not allowed : plain text only. You may post up to 5 website addresses within your comment.




Disclaimer

The Fallbrook Village News has tightened its' policy regarding comments.
While we invite you to contribute your opinions and thoughts, we request that you refrain from using vulgar or obscene words and post only comments that directly pertain to the specific topic of the story or article.
Comments that are derogatory in nature have a high likelihood for editing or non-approval if they carry the possibility of being libelous.
The comment system is not intended as a forum for individuals or groups to air personal grievances against other individuals or groups.
Please, no advertising or trolling.
In posting a comment for consideration, users understand that their posts may be edited as necessary to meet system parameters, or the post may not be approved at all. By submitting a comment, you agree to all the rules and guidelines described here.
Most comments are approved or disregarded within one business day.

RSS FeedFacebookTwitter



Advertisement for Stellar Solar





Subscribe




Most Commented


Reach Local Customers



The Fallbrook Village News The Fallbrook Village News
760-723-7319 - 1588 S. Mission Rd. Suite 200, Fallbrook CA 92028
All contents copyright ©2014
About Us
Earthquake Information
Business Listings
Contact Us
Letter to the Editor
Report a website error
Sitemap
Online Digital Edition
RSS Feeds
Login