Government cuts could affect Pike County businesses with defense ties

Published 11:00pm Thursday, November 29, 2012

Republicans and Democrats seemed to be making no ground on Thursday in talks to avoid year-end tax increases and spending cuts that threaten to harm middle class pocketbooks.

At issue is a bipartisan desire to prevent the wholesale expiration of Bush-era tax cuts and the simultaneous implementation of across-the-board spending cuts. The potential spending reductions, to be divided between military and domestic programs, were locked into place more than a year ago in hopes the threat would have forced a compromise on a deficit reduction deal before now.

Failure to do so results in the country falling off a “fiscal cliff” at the end of the year.

“The fiscal cliff is an agreement that was made a couple of years ago that there would be some improvement on the deficit, otherwise there will be triggered spending cuts,” explained Scott Beaulier, executive director of Troy University’s Manuel H. Johnson Center for Political Economy.

Beaulier predicts that some kind of agreement will be reached before the end-of-the-year deadline, but said that decision will likely be a patch on America’s financial troubles instead of much needed, significant reform.

“This could be a Band-Aid applied to a very serious situation,” Beaulier said. “Longterm budgetary commitments need to be considered, but both sides will likely be coming back to the table to fight again. This is something that has been happening again and again because things are polarized in D.C. right now. Something is going to have to give.”

As talks stalled Thursday, Democrats said any holdup was the fault of Republicans, who are balking at President Barack Obama’s plan to raise tax rates on incomes higher than $200,000 for individuals and $250,000 for couples.

The GOP said the White House was offering unspecified spending cuts this year. Those would be followed next year by legislation producing savings from Medicare and other benefit programs of up to $400 billion over a decade, a companion to an overhaul of the tax code.

Beaulier said he feels families with incomes below $250,000 won’t experience tax increases, but it’s harder to predict where the government will cut spending and how much.

“A lot of the cuts will be focused on defense,” Beaulier said, noting Sikorsky’s Troy Operations, Lockheed Martin and Ft. Rucker would likely be affected. “Cuts, if targeted on defense, could affect our area financially.”

Ranking Member of the Senate Budget Committee Sen. Jeff Sessions (R-AL) expressed his concern Thursday on the Senate floor regarding “secret negotiations” related to the fiscal cliff.

“All of this secrecy allows the President to position himself as being in favor of a ‘balanced’ plan while the only comprehensive proposal he put on paper, his FY 2013 budget, increases taxes to fuel a further increase in spending,” Sessions said.

Rep. Martha Roby (R-AL) said the possibility of reaching a fiscal cliff is worrisome.

“I’m very concerned about the effect it could have on families in Pike County and throughout Alabama. Higher taxes, higher medical costs for seniors, military cuts – there are real-world consequences at stake. That’s why we’re working to avoid the fiscal cliff in the short term and deal with the national debt over the long term,” Roby said. “I’m concerned about President Obama and the Democrats insisting on tax increases that would be harmful to small businesses. The real problem is spending, and Americans want responsible, reasonable reforms that promote economic growth.”
The Associated Press contributed to this report.


  1. BH1880

    Well what were you expecting? Democrats want to Tax the most productive and give to the least productive. Republicans are willing to raise taxes on the highest incomes with corresponding cuts to those that have been living off the taxpayer for years. News reports are that everything is on the cutting-block except entitlement programs (remember those free phones with 240 minutes). Instead of trying to reach an agreement, Democrats are campaigning and see the most important thing is to blame the Republicans. I see at lease 2 more businesses have closed in Troy.

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  2. paradisereturn

    How aloof and detached can you be? – This same story is being replayed all over the country in a thousand different newspapers. The fact is if spending is cut dramatically in an already weak economy we can look forward to at least a year long recession. In the interest of partisanship delusional ideologues who can’t see past today are going to wreck our economy because then they don’t have to make a deal with Obama.
    If Republicans take us over the cliff because they want the richest Americans to be taxed 35% instead of 39% (the Clinton era rate) they can look forward to minority status for a very long time.
    The only solution is raising the top rates, taking capital gains taxes close to where they were in 90′s and reducing spending in measured steps over the long term. – If not our already fragile economy is about to be butchered and people are going to suffer. Quit being reactionary hacks and accept the implications of the situation.

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  3. Curly

    Don’t we want government to cut spending? The government doesn’t create jobs anyway, right?

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  4. Prophet

    The cuts to defense and entitlements need to be at least twice the amount proposed. The tax increases should never be allowed to take place. The problem this country has is not a revenue problem but a spending problem. Every with a triple digit IQ knows that already. Needless to say the 47% that receive these free rides on another mans hard earned dime will not agree with me.

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  5. Prophet

    Paradisereturn, this country needs a financial collapse that imposes hardship on its population. We need civil unrest and a population reduction. There are not enough jobs within our society to create self sufficiency for every citizen. Since it is morally unfair to extort money (taxes) from one citizen in order to support another citizen then the next best option if decrease the population. It’s coming to that anyway. Just as well let us crash and get it over with. It is not right to tax any citizen a higher percentage than another citizen. That’s nothing more than transferring wealth at the point of a gun. It amounts to robbing a man at gunpoint.

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  6. Prophet

    Curly the 47% i referred to is the number of households that receive any subsidy in any form from the US government. It includes SS and medicare although i dont personally view those as entitlements . They were designed as insurance after a person reaches retirement age. Actually at present GDP numbers it is impossible for the US to balance its budget as well as pay on the publicized 16 trillion debt. They would need to tax everyone 100% of their earning to do that. Needless to say those GDP numbers and revenue derived will increase dramatically as inflation is certain to take place in the near future. Hopefully not hyperinflation but that possibility does exist. The true long term liabilities of the US is estimated to be between 80 and 120 trillion by most every economist. No one can get it exact due to the hundreds of variables and affect that total. Even if the US falls off the “cliff” it will still be running almost a trillion dollar deficit each year. Remember the cliff only generates about 500-600 billion a yr in saving and addition taxes. It comes no where close to balancing the budget much less paying down the debt. Bottom line is this country will experience a financial collapse . I predict a inflationary collapse that debases the dollar to near worthlessness.

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  7. BH1880

    As a Republican said the scariest words in the English language are “I am from the government and here to help”. Billions of dollars printed and spent on companies that have gone bankrupt. The value of money is approaching the value of toilet paper. He saved the auto industry, only to have it follow the path of Chrysler (that has not paid off it’s bailout either)and is now owned (58%) by Fiat of Italy. Chevrolet announced this morning that it will open a third factory in China, with many auto parts already made in China. UAW workers will follow in the wake of Twinkies workers.. 4 years ago coffee was $6.00 a can, now $10.00, Peanut butter was $4.00, now $7.00, pk. frozen vegetables $1.59, now $1.99, blue jeans $12.99, now $17.99 and not even made in this country. Inflation is about 8% and going to 15% next year and will not stop there. Increase spending only increases inflation. The damage has already been done, the amount of money spent and owed by the government is beyond comprehension. The calender says the year is 2,012 years and if the debt is paid off at $1 million a day it would take over 48,000 years. The Democrat plan, increase spending, drive companies overseas and blame Republicans.

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  8. Prophet

    By the way curly i am guilty of typos. EveryONE with a triple digit IQ could read through typos. LOL Here is one of dozens of articles that i’ve read that quote the 47% range i referred to. WDM that pierce guy must be a well knowledgeable man. Curly can you read this ? It’s easy….. i cdnuolt blveiee taht I cluod aulaclty uesdnatnrd waht I was rdanieg. The phaonmneal pweor of the hmuan mnid, aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it dseno’t mtaetr in waht oerdr the ltteres in a wrod are, the olny iproamtnt tihng is taht the frsit and lsat ltteer be in the rghit pclae. The rset can be a taotl mses and you can sitll raed it whotuit a pboerlm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe. Azanmig huh? yaeh and I awlyas tghuhot slpeling was ipmorantt! if you can raed tihs forwrad it.

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  9. OldSchoolPike3Worker

    Look folks, the gig is up. The fix is in. So far this whole fiscal cliff is about raising taxes on job creators when the real issue is baseline budgeting and the assumption that if spending doesn’t go up then we must consider it a cut. Any tax increases or spending cuts that this bunch in Washington comes up with will just be a symbolic gesture. Unless and until the fiscal culture of our federal government makes a 180 degree change, we are going bankrupt. We are looking at an unsustainable scenario here. The 2012 election has proven to me that we can’t vote our way out of this. We are screwed!

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  10. Curly

    Prophet, you don’t receive any subsidies from the US government? Do you have student loans, a mortgage, or children?

    Also, to people thinking the United States can go bankrupt, that’s not really possible since the US is in control of its own currency. There will never be an issue of whether the government can pay someone, because they can always “print money” to cover their debts. Of course, the only problem with that is it devalues the dollar.

    BH1880, annual inflation rates are not out of line historically. In the last 20 years, inflation has not passed 4% annually, in fact in 2009, there was actually deflation of 0.34%.

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  11. Prophet

    No curly i dont have any student loans, no mortgage and my children are grown. I have never received nor wanted any money from the government.I just want them to stop taking what i earn and give to others ! The weimar republic and zimbabwe thought they could print themselves out of debt too. As anyone can clearly see it doesn’t work. The US can default and will default when the dollar is no longer used as the worlds reserve currency. Six other countries are now using their currencies for bi-lateral trades and many more will soon follow . If the euro wasnt in dire straits the dollar would already be in more serious trouble than it already is.

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  12. Prophet

    Curly do you actually understand exponential math , doubling time and what the posted inflation rate of 3.5 does to prices and how rapidly it does it? 3.5 average inflation is a killer over a century. In the past 100 yrs it has devalued the dollar to 6 cents of purchasing power. Fractional reserve has guaranteed the collapse of the dollar because there is never ever enough dollars to cover the debt owed.

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  13. Prophet

    When discussing the word “value” one must remember the basic definition of the word. Nothing on this planet has any value unless we as humans require it to survive. Money itself is nothing more than a standardized means of exchange for those items required (or desired) to survive.It’s value is directly correlated to supply and demand.Money is worthless without the ability to trade it for a necessity (or desire).Anytime the supply increases the quantity of the demand increases, not the quality of the demand.The quality decreases as the quantity increases.

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  14. Prophet

    Curly, in reply to your question concerning dependents.No it’s not fair for someone with kids to pay more taxes than me. I never said it was. You’ve missed the whole point of my comments.There’s very little about the tax structure in the US i do agree with.I thought i had already posted a comment that i believe the only fair tax is a consumption tax.Like a sales tax.For example tax everyone 20% on every dollar they spend. Since most people spend almost everything they ear this would be fair. Everyone would be taxed based on their ability to spend. There’s many books that explain our monetary system but watching this video will give you an overview of how money is created from debt.

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  15. Prophet

    curly concerning the double eagle. No i didnt miss your point. i was saying the same thing. Of course invest your money but invest it in something that has intrinsic value. Never save fiat currency because it is designed to be debased. The best investments has always been something that has a limited supply.Gold, silver , copper etc. Never invest in government bonds because what little interest they earn is lost by way of inflation. Doing so has historically been a safe haven and it is designed to allow your money to retain its value but not increase its real value (purchasing power) over an extended period of time.

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  16. Prophet

    Curly in response to your 9:34 comment. Just how in the world can you define a mortgage or student loans as welfare? They must be repaid with interest. No one has to pay back welfare or food stamps. That’s ridiculous to even think such a thing. You did sense it correctly when you commented i am angry. Yes i am superior to the people that live off entitlements. I am self sufficient, they are parasites. They themselves are not smarter than me . They are lazy , worthless ignorant individuals that have a government extorting from the self sufficient productive to fund their lifes. Without the government they would cease to exist because most (not all) are to dumb and worthless to survive on their own ability. I am ecstatic that this country is broke and almost at the point of financial and social collapse. As i said earlier , i look forward to that day. That’s what it will take to restructure this country to a viable, productive society. Bandaids will no longer work.

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  17. BLOOD

    I am willing to bet that there are not very many folks living in Pike County Alabama who earns or has earned over $200.000 annually. Why would a bunch of poor and lower middle-class folks defend the rich? Many rich folks would not extend their hand for you to shake it. These folks don’t care about you’ll so find something positive to do. Go rake an old lady’s lawn or take your parents to the park.

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  18. BH1880

    I did not know this was still going on. I remember what effect LBJ’s “war on poverty or The Great Society” and the war in Vietnam had on the economy. Back then there was no talk of complete collapse of the dollar as now.

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  19. Prophet

    Gold and silver are not the best investments . Brass and lead is !

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  20. Prophet

    To Curly and readers of these comments . I earlier posted this line “The only thing i can say good about our present tax structure is damn God for deductions and write offs !” I have no idea why i typed what i did . Maybe i was on the phone at the time and typed what i thought or said but it should have read Thank God.

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