Walker not planning for country going over cliff
Photo
Wisconsin Gov. Scott Walker, right, speaks as President Barack Obama meets with members of the National Governors Association (NGA), regarding the fiscal cliff, Tuesday, Dec. 4, 2012, in the Roosevelt Room at the White House in Washington. Counter clockwise, from Walker are, Minnesota Gov. Mark Dayton, Arkansas Gov. Mike Beebe, Utah Gov. Gary Herbert, Budget Director Jeff Zients, White House Director of Intergovernmental Affairs David Agnew, , Director of National Economic Council Gene Sperling, NGA Vice Chair, Oklahoma Gov. Mary Fallin, and the president.
MADISON — If the country goes over the so-called “fiscal cliff” in January, it could mean a loss of several hundreds of millions of dollars in tax revenue to Wisconsin and force Gov. Scott Walker to propose a more austere state budget than he hoped.
For now, Walker is taking a wait-and-see approach. His budget isn’t due to be released until February — and by then President Barack Obama and congressional Republicans may reach a deal to avoid an automatic series of spending cuts and tax increases scheduled to take effect at the start of the new year.
The lack of a deal would result in the loss of hundreds of millions of dollars to the state due to a drop in the gross national product and personal income, said Bob Lang, director of the nonpartisan Legislative Fiscal Bureau.
The Legislative Fiscal Bureau will release its economic forecast in mid-January. Those numbers will be used by the Legislature when building the budget for the next two years.
Lang said his office hasn’t done an estimate on what effect going over the cliff will have, but he said it has to translate into “several hundreds of millions in tax revenues.”
But Walker said Wednesday that he was not preparing an alternate budget in case the country goes over the cliff.
“What we have in Washington, every day, every hour, is pretty fluid there. So it’s pretty hard to prepare because I don’t think we really know,” Walker said. “Each of the major proposals that were on the table yesterday were largely dollar amounts without a lot of specifics attached to them. So it’s hard to prepare without knowing substantively what’s in each of the plans.”
Democratic state Rep. Jon Richards said Walker and Republican leaders should be pressuring fellow conservatives to strike a deal instead of putting the state and country in jeopardy.
Walker joined with five other governors who traveled Tuesday to Washington to meet with Obama and talk about the implications of going over the cliff. Walker said they told Obama that they hoped the eventual solution would not harm state and local governments.
“The biggest fundamental concern I have is about what it does to the economy and what unintended consequences there are,” Walker said of the fiscal cliff and its possible solution.
Walker’s administration reported on Nov. 20 that it was poised to end the current two-year budget cycle in June with a net $283 million surplus, in addition to making a $108 million surplus into its rainy day fund.
However, the report warned about uncertainty over the fiscal cliff. It did not put a dollar amount on what not reaching a deal would have on the state budget.
The state’s reserves could be tapped if necessary to deal with a loss in revenue due to the fiscal cliff problem, said incoming Republican Assembly Speaker Robin Vos.
Still, the state is in a lose-lose situation, Vos said in a statement.
“No matter what happens at the federal level, there will be a negative impact on Wisconsin,” Vos said. “If we hit the fiscal cliff, we’ll see massive spending cuts, and if President Obama gets his way, we’ll see higher taxes.”
Lang said his guess that no deal could mean a loss of hundreds of millions in tax revenue is based on national economic forecasts that show gross national product and personal income will take a hit if the nation goes over the fiscal cliff.
Global Insight’s most recent economic forecast, on which Walker’s administration based last month’s budget projection, assumed 1.9 percent GDP growth in 2013 followed by 2.8 percent growth in 2014. However, if the country goes over the fiscal cliff that projection called for a drop in GDP of .05 percent in 2013 followed by just a 1.3 percent increase in 2014.
Similarly, the forecast predicted 3.9 percent personal income growth next year followed by 4.9 percent the second year. But without a solution to the fiscal cliff, personal income growth is predicted to be just 1.5 percent followed by 2.7 percent.
Wisconsin’s economy tends to closely mirror what is happening nationally, so the real question is what happens to the manufacturing sector and unemployment as people have less money to spend, said Todd Berry, president of the nonpartisan Wisconsin Taxpayers Alliance.
“The biggest impact will be the spending cuts and tax increases that would cause a recession, which in turn is going to mean higher unemployment in Wisconsin, less manufacturing activity and less tax activity,” Berry said.
Assuming no deal can be reached, Walker would be forced to either find more revenue to make the state’s budget balance or cut spending, Berry said. A third option would be to put off paying for new proposals until the next budget, on the hopes that more tax revenue is available by then, he said.
Walker will release his next two-year state budget covering July 2013 through June 2015 in February.
Associated Press writer Todd Richmond contributed to this story.
Dec 9, 2012 at 12:17 a.m.
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Stubby you must have missed the fact based discussion on obamacare in this state. It is a federal program, regardless of what you, I, or the Gov wants it is already law. The idea of a state-run (in name only) exchange when the state has very little say (the rules have yet to be fully written) and shares a large chunk of the funding is good for this state's tax payers exactly how? Please spell out how the state run program would be any better than the federal exchange. Then please explain the cost difference between the two, thanks.
Dec 8, 2012 at 10:02 p.m.
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Walker also wasn't planning on Obama winning re-election. This led to him having no plan on how to implement Obamacare in Wisconsin in a way that might actually benefit the people of Wisconsin. Nope - he just "punted" that one. One thinks he may have learned from that mistake, but once again he has no plan on how to help his constituents if the President and Boehner continue to act like feuding 13 year old girls. Why? Because his "handlers" haven't told him what to think yet.....
Dec 8, 2012 at 3:40 p.m.
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BenghaziBob, truth truth and more truth, I know and others are oblivious. If you go to Eagle Forum and go to past shows 7-14-12 you can listen to Mason Weaver. He explains it is tribalism.
Dec 8, 2012 at 2:03 p.m.
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Here you go wislady:
http://blogs.hbr.org/cs/2012/12/how_corr...
Dec 8, 2012 at 8:31 a.m.
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Obama 2008: $9 trillion debt under Bush = irresponsible.
Obama now: $16 trillion debt under me = part of an economic recovery.
Dec 8, 2012 at 8:13 a.m.
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Motorman
Why go to Mississippi, just go to Milwaukee and check out Lena Taylor's district.
She is ethically challenged, to say the least.
http://www.politifact.com/wisconsin/stat...
Dec 7, 2012 at 7:55 p.m.
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Motorman
No, I'll just be here waiting for the movement to come to me.
Dec 7, 2012 at 6:24 p.m.
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BenghaziBob
Dec 7, 2012 at 11:31 a.m.
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In years past we would have considered comments like yours as stereotypical and more likely racist. Now it is Republican mainstream thought...
Dec 7, 2012 at 2:58 p.m.
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Congratulations are in order for Michigan on it's way to becoming the 24th right to work state. Are you paying attention to this process Governor Scott Walker?
Dec 7, 2012 at 1:51 p.m.
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Ah the usual bunch of fools commenting with no real substance once again.
Dec 7, 2012 at 1:35 p.m.
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Thank God for Governors like Scott Walker who put messages in place to help combat Obama's fiscal nightmare at the federal level.
Dec 7, 2012 at 12:52 p.m.
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MooShoo, So you think the successful people in America should be deemed as the enemy by the current government and have what they worked for taken away? I see you are from the "you didn't build it" crowd.
Dec 7, 2012 at 12:26 p.m.
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Ben...you would think so.
Dec 7, 2012 at 11:44 a.m.
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Time for your nappy Ben.
Dec 7, 2012 at 10:16 a.m.
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NV...for the same reason the replacement for Jim Demint, Tim Scott, is described as an African-American in all the articles..because they are African-American. And the articles also pointed out after the election many times that somewhere around 98% of African-Americans voted for Obama. Is that racist too?
Dec 7, 2012 at 10:11 a.m.
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MBHammer: Obama did not lift the work requirement.Please do some research about this and don't just rely on Rush(I can say anything,and low informed voters will believe me)Limbaugh. There is a wealth of info at your fingertips please take advantage of it, as all of us should.
Dec 7, 2012 at 9:36 a.m.
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I miss the Greatest Generation, at least they knew that if you were successful in business they did not regard you as the enemy.
Dec 7, 2012 at 9:05 a.m.
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I haven't seen a liberal posting yet that can explain why Obama removed the Bill Clinton requirement to look for work.
Dec 7, 2012 at 8:55 a.m.
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540,000 people quit looking for jobs last month. Great job, Barry.
Dec 7, 2012 at 8:51 a.m.
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As Rush pointed out, It's hard to compete with Santa Clause.
Dec 7, 2012 at 8:10 a.m.
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More PROOF of Walker and ALEC AGENDA - Flying to Arizona to further ALEC. Time for people to wake up to the ALEC agenda.
http://www.thenation.com/blog/166038/how...
"ALEC EXPOSED FOR 24 HOURS"
http://www.commonblog.com/2012/01/31/ale...
"ALL ABOUT ALEC" - Koch funded...
http://www.dailykos.com/story/2011/10/25...
"ALEC EXPOSED"
http://alecexposed.org/wiki/ALEC_Exposed...
"ALEC - FUNDING & SPENDING"
http://www.prwatch.org/news/2011/07/1088...
"ALEC EXPOSED - KOCH CONNECTION"
http://www.thenation.com/article/161973/...
Dec 7, 2012 at 8:02 a.m.
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Those bringing up GUNS like you are Nuts!
Dec 7, 2012 at 7:58 a.m.
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The John Doe is not over Scotty...
"For Scott Walker, Walls Are Closing In"
http://crooksandliars.com/karoli/scott-w...
"Scott Walker Accused Of Violating OVER 1000 Campaign Finance Laws"
http://www.rawstory.com/rs/2012/01/11/sc...
"Tim Russell Pleads GUILTY To EMBEZZLING - OPERATION FREEDOM FUNDS As JOHN DOE EXPANDS"
http://scottwalkerwatch.com/2012/12/01/t...
"Scott Walker Called Budget Bill First Step of Anti Union Strategy"
http://thinkprogress.org/economy/2012/05...
"SCOTT WALKER - DIVIDE & CONQUER VIDEO"
http://www.motherjones.com/mojo/2012/06/...
"WALKER MORE NIXONIAN THAN RICHARD NIXON SAYS JOHN DEAN"
(And we know how honest Nixon was...)
http://host.madison.com/news/local/madis...
Dec 7, 2012 at 7:29 a.m.
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donnaw....Why would you label the Michigan rep as an African American? Playing the ol' race card, huh?
BenghaziBob....Be careful about wishing liberals were dead. We own guns too.
Republicans and Baggers....We won. You lost. Get over it and at least attempt to present the face of being patriotic Americans.
Dec 7, 2012 at 5:31 a.m.
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poorrichard....good point! Did you see where an African-American representative in MIchigan's state govt said Obama should send money to the state to save it because Michigan voted for Obama. As she said, "a quid pro quo."
Dec 6, 2012 at 6:47 p.m.
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It is amazing the tortured measures the news media goes through to NOT tell us all the new taxes and regulations coming our way thanks to the Obamacare law. Just remember the taxes Obamacare brings is on top of the taxes we already pay.
Dec 6, 2012 at 6:21 p.m.
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It's not actually a cliff.
Dec 6, 2012 at 5:54 p.m.
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Hey, maybe we could give that $283 million surplus to Detroit. They've earned it by voting for Obama.
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