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Los Angeles Wave - Rep. Karen Bass hints at 'fiscal cliff' deal

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Location: Unknown

By Olu Alemoru

Democrats and Republicans will most likely hammer out a temporary deal to avert the so-called "fiscal cliff" -- the economic effects of the ending of the Bush tax cuts and planned spending cuts under the Budget Control Act of 2011 -- whose deadline looms Jan. 1.

That assessment was made by Rep. Karen Bass, D-Los Angeles, in a Dec. 6 conference call with local journalists, where she warned that California stands to lose as much as $4.5 billion in federal funds and more than 200,000 jobs next year if a deal is not done.

In a recent interview, Robert Kleinhertz, chief economist at the Los Angeles County Economic Development Corp., said automatic cuts would represent a loss of $22.7 billion in gross state product, the annual measure of goods and services produced in the state, adding that it would also mean the loss of 225,000 jobs statewide.

Failure to reach a deal would mean about 400,0000 jobless Californians who have been receiving unemployment benefit extensions will stop receiving checks at the end of the year, Loree Levy, a spokeswoman at the state Employment Development Department told the Associated Press.
She noted that the federal government has paid $40 billion in federal extension benefits in California since July 2008.

Levy said the state mailed out roughly 360,000 letters over Thanksgiving week telling people how they can find other forms of assistance, such as food stamps and social services. The average person receives $300 a week in unemployment assistance.

Programs like Head Start and those that promote HIV/AIDS testing would also be hit hard.

According to a report, "Under Threat: Sequestration's Impact on Nondefense Jobs and Services," nearly $75 million could be cut from Head Start's Fiscal Year 2012 $961 million California budget resulting in 11,902 fewer children being served.

In terms of HIV testing, that equates to $1.3 million of $17 million in funding and 34,133 fewer residents being tested.
Compton resident Harvesha Knight, 27, a mother of three young children, recently had to defer a nursing course for a year because the city's Head Start program had already been reduced.

"I had to postpone my education until my 1-year-old son starts kindergarten in August of next year," she said. "I don't understand all what's going on [in Washington] but these things are affecting kids and parents."

Meanwhile, Chistopher Hucks-Ortiv, of the private nonprofit health agency John Wesley County Hospital (JWCH), said the potential cuts would be "awful."

"One of the things we have here in L.A. County is that communities of color are especially heavily impacted," he said. "It's not an epidemic, it's a pandemic with the rates of new infection and the challenges of getting connected to medical care."

In the 30-minute media briefing, Bass sounded a cautiously optimistic note while recognizing that if a deal is not done "then there would be automatic cuts across the board, affecting all the programs that are important to our community, from education, health care ... etc."
"Despite the current stalemate, I believe very strongly that we will come to an agreement," she said. "I don't believe it will be a grand deal because that involves tax reforms and looking at long-term programs like Medicare and Social Security and we're not going to be able to do that in 21 days.
"So, I believe we'll come up with a short-term fix with a long-term commitment for substantial change. That might be before Christmas, but more than likely you'll get a some kind of verbal agreement, and we'll come back after Christmas and actually vote."

She added: "It's just my prediction, but when Speaker [John] Boehner came back after the election and said on Nov. 7 that he understands that revenue needs to be on the table, to me that was a huge concession for the Republican leader to make and I think it's indicative that a deal is going get done.

"I think what is happening now is a lot of posturing on both sides, but that's part of the negotiation process."
However, playing devil's advocate for a moment, the congresswoman also sounded optimistic even if no deal was signed.
"Let's just say we came to no agreement on taxes and they went up on Jan. 1," she said. "That would be terrible, but it wouldn't be the end of the world because they can come down on Jan. 2.

"Where it's causing major grief is to the IRS because they are already having to prepare for tax day in April and people start to return their forms way before then."

Bass, who added her name to a petition filed by Democrats who called on Congress for an immediate vote on extending the Bush era tax cuts for Americans earning less than $250,000 a year, also praised Boehner for what she characterized as raining in some of the tax hawk mentality in the Republican Party.

"Speaker Boehner could have great success working across the aisle with President Obama to meet our current fiscal challenges -- but the GOP will have to start leading on these issues and stop allowing people like Grover Nordquist [president of Americans for Tax Reform] to lead them.
"I was encouraged for that for first time [Boehner] dished out some punishment to misbehaving members, firing a couple of people on committees. That put everyone on notice and now you're hearing behind the scenes that the Republican Caucus is all of sudden very supportive of him."
The House of Representatives was scheduled to vote Thursday night on a Boehner plan, labeled Plan B that would extend the Bush era tax cuts for those households making less than $1 million a year.

A second part of the plan would change the automatic spending cuts set to kick in next year under the fiscal cliff, replacing cuts to the military with reductions elsewhere.

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