Michigan Faces Economic Uncertainty With Fiscal Cliff Deal Delayed
DETROIT (WWJ) – We continue to watch talks in Washington aimed at keeping the country from falling off the so-called fiscal cliff.
Lawmakers on Capitol Hill face a Monday night deadline to reach a budget agreement before steep tax increases and spending cuts begin to take effect Jan. 1. The cuts and increases would come at a time when the U.S. economy is still struggling to recover from the last recession.
WWJ Newsradio 950 and Fox 2 Business Editor Murray Feldman talking about one of the major consequences if no deal is reached.
“Here in Michigan a lot of people are on unemployment, they will lose their benefits,” said Feldman. “That’s an immediate hardship on families, but it’s also an immediate impact on the economy, since those receiving benefits usually spend everything they receive — they receive a hundred percent of those benefits, and they’ll spend a hundred percent of those benefits.”
The House and Senate planned to meet today — a rarity for New Year’s Eve — in hopes of having a tentative agreement to consider.
“If they don’t reach an agreement, if they reach a partial agreement if they leave something open to discuss at a later time, that’s uncertainty because nobody will know the entire outcome,” Feldman said. “And if you tell people that they’re going to have less money to spend in the coming months, without giving specifics, (consumers) will probably put off some major purchases; maybe cars, washing machines, dryers, furniture — all of that’s made in Michigan.”
Feldman says because companies need to plan ahead as well, Michigan businesses may put expansion plans on hold and put off hiring.