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Editorial: New name won’t alter dire impact of fiscal cliff

Among some national observers in the comfortable pundit class, an above-the-fray view is beginning to take shape in which the impact of plunging over the “fiscal cliff” is downplayed. One parlor game involves finding a new metaphor. Chill out, they say, it’s more like a slope.

Viewed from on high, the numbers may not seem so scary, but on the ground the peril comes into sharper focus. State and local governments have to balance their budgets; they can’t phase in the impact.

Changing the metaphor won’t change the fact that the $500 billion in tax increases and spending cuts that are set to begin on Jan. 1 would plunge the economy back into recession and push the unemployment rate back over 9 percent, according to the Congressional Budget Office. Markets would probably decline, hurting state pension investments. Federal dollars flowing back to states would dwindle.

According to a Pew Center on the States report, Washington could lose federal grants that comprise 6.1 percent of state revenue. The state would also lose some federal spending on salaries and defense and non-defense procurement.

Some states that link their income taxes to federal income taxes might see revenues increase, but it’s not likely this would offset the spending cuts and other impacts. Washington state doesn’t have such a tax, so rising federal rates wouldn’t enrich state coffers. Instead, the general slowdown in the economy and the increase in unemployment would erode sales tax revenue, which is vital to municipal governments, too. The state is already facing a $900 million shortfall and a potential $1 billion basic education funding challenge.

Like most states, Washington has already been through a difficult period of budget-cutting. The easy cuts have been made. The one-time savings have been taken. The last thing legislators need is fallout from federal leaders who refuse to compromise.

Without federal action, a total of 2 million Americans stand to lose unemployment benefits. These emergency benefits for people out of work for at least six months have been in place since June 2008, and have been extended 10 times.

Without federal action, the ranks of the unemployed would swell by an additional 2 million people in fiscal years 2012 and 2103, according to a George Mason University study. That’s a total of about 41,000 jobs lost in Washington and about 10,000 in Idaho. For those two fiscal years, the total impact on the Washington economy would be $4.2 billion and $1 billion in Idaho. Cuts in federal aid would impact important defense, education, housing, transportation and safety net programs. The slashing would affect every federal program aside from Medicaid, Medicare and Social Security.

So call it a “cliff” or a “slope” or whatever, but let’s not pretend this is a game. If Congress and the president cannot agree on a plan to pull the nation back from the brink, the impact will be sudden and painful.


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Editorial: Washington state lawmakers scramble to keep public in the dark

State lawmakers want to create a legislative loophole in Washington’s Public Records Act. While it’s nice to see Democrats and Republicans working together for once, it’s just too bad that their agreement is that the public is the enemy. As The Spokesman-Review’s Olympia reporter Jim Camden explained Feb. 22, lawmakers could vote on a bill today responding to a court order that the people of Washington are entitled to review legislative records.