The fiscal cliff has been reached and the Senate has been unable to reach a compromise. This means automatic spending cuts, called "sequestration", will be enacted, along with increase in tax rates. Part of the spending cuts will come from defense spending, as well as the end of unemployment benefits. The Wall Street Journal reports that this includes mine-resistant vehicle purchasing, rental subsidies for rural areas, and government food inspection.
How might this affect the city of New Orleans? If the fiscal cliff becomes reality and Boehner and Biden do not reach a compromise, Medicare patients may suffer the most. A decade ago 14 percent of Louisiana Medicare beneficiaries had no other means to pay for costs not covered by the program. 32 percent of the beneficiaries in the state are enrolled in HMOs.
The fiscal cliff would also see the end of the Bush era tax cuts, with middle-class families being affected by the changes to the payroll tax.A fact sheet for The The Tax Relief, Unemployment, Insurance Reauthorization and Job Creation Act for Louisiana notes the payroll tax cuts were worth about $741 a year for Louisiana workers, according to U.S. Census calculations.
Under the fiscal cliff, $503 billion is expected to be cut, between the fiscal years of 2012 and 2013. Obama said a deal would emerge that would raise tax rates of individual incomes of more than $400,000 a year, with the arguing point being putting off the spending cuts for $24 billion in savings, from unspecified revenue.
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