Monterey, CA Fiscal Cliff Could Hit Low Income Seniors Hard
by Richard Kuehn on 11/21/12
View From A Non-Profit Serving Carmel, Carmel Valley, Gonzalez,
Greenfield, King City, Marina, Monterey, Pacific Grove, Pebble Beach, Salinas,
Seaside And Soledad California
You
may have been reading lately about the so called fiscal cliff and how we might
be about to fall off of it. What is
it? If legislators aren't able to agree
on a new federal budget, huge automatic budget cuts will come into effect in
January. A government computer will
start slashing everything from Medicare benefits to military spending to
government workers. Federal Reserve
Chairman Ben Bernanke
on Tuesday told Congress and the Obama administration that if they don't reach
a consensus on a budget soon, we could go into a recession again. Sadly, The
Wall Street Journal pointed out today that the hardest hit households if we
should fall off of this cliff would be lower-income households. A married couple making $20K to $30K would go
from receiving a tax credit of $15 to owing $1,408, according to the Tax Policy
Center, a joint venture of the Brookings Institution and the Urban
Institute. About 90% of households would
pay a higher tax bill next year fueled by $400 billion in automatic tax
increases. That, paired with $100
billion in automatic spending cuts, would likely be enough to push us back into
a recession, one that is referred to as
a "double dip". Unlike a nice
ice cream cone, this kind of a double dip is two back-to-back recessions which
will leave a bad taste in all of our mouths.
Dr. Michael Lapkin, a 72-year old pediatrician, was interviewed by the
Journal. He went back to work after the
financial crisis hit and he had to come out of retirement. He said the new automatic increases would
cost his family $4,000 to $5,000 per year and he would be forced to cut back
spending. He said he knows a number of
other retirees who started working again or moved out of the gated community
where he lives. "If taxes go up,
it's an even greater burden," he said.
Seniors have seen so many cuts in resources over the past couple of
years due to California's budget woes.
This will just be one more hardship they will have to deal with if a
budget isn't agreed to soon.
Please note that this blog reflects my personal opinion and may or may not reflect the opinion of Hands To Help Seniors and the individual members comprising the Board of Governors.
