While a deal was struck at the last minute to prevent the nation from plunging over the so-called “fiscal cliff” with the arrival of the new year, it really only pushed the issue into the future.
And that means there continues to be a special risk for our community.
The deep automatic cutbacks in spending – half of them involving defense spending – were averted, but perhaps only temporarily. Known as sequestration, the threat of the cuts was intended to force the White House and Congress to address the nation's growing indebtedness through a combination of increased revenue and spending cuts.
The deal reached on New Year's Day by Congress addresses some of the revenue side of the equation by raising taxes for the top 2 percent of taxpayers while keeping current tax rates the same for other taxpayers.
But the spending cuts portion of sequestration was simply put off for a couple of months. That battle is still to come – along with one over a debt limit extension for the nation – and that means defense spending could still be affected – which in turn could still hurt the Yuma area.
As the end of year sequestration deadline approached, an Arizona military advocacy group warned of the severe potential consequences for not only Yuma County – which hosts two military installations – but the state as a whole.
“Arizona would be critically and negatively affected across defense and into other sectors of its economy” if the automatic cuts went into effect, according to the chairman of the Southwest Defense Alliance.
A study done for the group estimated the sequestration losses for our state could have amounted to 99,000 lost jobs, $5.4 billion in lost economic output and a loss of $1.7 billion in personal savings over eight years.
With the reduced government spending issue still up in the air, a question remains about what will happen with defense spending. It is something Yuma County residents and Arizonans need to be watching closely.