Friday, Dec 7, 2012
Governor Beebe's weekly column and radio address: The Fiscal Cliff
We are all anxiously watching Washington, D.C., to see if the Obama Administration and Congress will be able to work together and avoid the so-called “fiscal cliff.” Significant spending cuts and tax increases are scheduled to kick in on January 1st if the federal government can’t produce a long-term plan to reduce our nation’s deficit. The cliff is a drastic measure, but it’s one of the federal government’s own design, agreed to by both Republicans and Democrats in 2011. Both sides made the terms precipitous, thinking that the severity of looming cuts and taxes would overcome political disagreement. So far, unfortunately, no long-term agreement has been reached and gridlock persists.
While the focus remains on Washington, the fiscal cliff carries with it forced cuts in funding for all of the states, as well. While we don’t know what the full impact for Arkansas would be, our Department of Finance and Administration has identified nearly $55 million in federal funding that we are certain would be lost. And most of that federal money is intended for education or human-services programs, in other words, where there is great need.
With all states concerned about the consequences if inaction continues in Washington, five of my fellow governors and I were invited to D.C. to meet with President Obama and congressional leaders on behalf of the National Governors Association. While we all came from different states with different concerns, the six of us were a bipartisan group carrying a common message.
We are a nation that understands shared sacrifice is necessary to reduce our deficit. Some folks will pay higher taxes or have fewer deductions, and some services will be reduced. However, governors worry that many of the programs mandated to share costs between state and federal governments could fall victim to cost shifting. We’re concerned that federal money for those programs could be reduced to show a savings, but the mandates would still exist. This would place the burden on states to re-direct significant money away from other necessary services. We will work as a state to protect programs that lose federal funds, but rigid mandates could put us in court if our limited resources cannot fully compensate for them.
My trip to Washington, D.C., left me with the impression that good-faith work continues to avoid the fiscal cliff. Vice-President Biden, who was at our meeting with the President, will remain a conduit between the Administration and governors as negotiations go forward. This situation has escalated to a point that our country should never have reached; yet here we are.
In the mid-1990s, President Clinton worked with a Republican-majority Congress to bring down our deficit and created federal budget surpluses. So, we know it can be done. But time is running out as the deadline approaches. An agreement to avoid the cliff will be the best thing for our nation’s future, even though it will bring with it some short-term pain and sacrifice. I believe that we remain a nation that values the power of compromise for the common good.