$600 billion in tax hikes and spending cuts could be looming in the new year.
It’s the fiscal cliff battle between Democrats and Republicans that’ll have big impacts on Idaho.
Congressman Mike Simpson (R-Idaho) doubts his colleagues will reach an agreement in time.
“Unfortunately, I’ve come to the conclusion — I think that the administration’s plan is to go over the fiscal cliff and try to deal with it next year,” Simpson said.
Tuesday brought another day of disagreement as lawmakers try to avoid the fiscal cliff.
A spokesman for Senator Mike Crapo (R-Idaho) says the average family in Idaho will see their taxes go up $2,000 to $3,000 annually if nothing is done.
Simpson also paints a grim picture.
“The energy and water budgets would be down about nine percent, which is going to have an impact at the Idaho National Lab,” Simpson said.
“Unfortunately, there’s not a whole lot we can do as individual taxpayers,” said financial strategist Blayne Andersen, who manages money for Idahoans.
Anderson says many of his clients are reacting to the situation in Washington.
“Many of them were planning on retiring as of [Dec. 31] this year, but they’re going to give it a few months to allow things to settle — to see how the markets respond,” Andersen said.
Democrats suggest raising taxes for Americans making over $250,000 each year. Idaho’s Republican lawmakers don’t want that.
“I think that’s a political decision that Republicans will get blamed for,” Simpson said.
Idaho is not a wealthy state. The average family makes about $47,459 a year.
Although the wealthy represent such a small sliver of Idaho, Simpson still agrees with the Republican approach.
“There’s nothing you can get for your constituents,” Simpson said. “What you’re going to do is get something for the country.”
Simpson and his fellow Republicans have different plans to tackle a $16 trillion debt.
“You’re not going to solve the financial problem in our country if you’re not addressing what is driving the budget deficit that we have,” Simpson said. “And that’s entitlement spending.”
A lot of Idahoans depend on programs like Social Security and Medicaid.
Simpson explained that those programs are exempt from any budget cuts that would happen if we go over the fiscal cliff.