As the national march over the so-called :”fiscal cliff” advances, financial experts are issuing advice on how to lessen the individual tax liability. Even savvy agents for professional athletes are in on the game, negotiating year-end bonuses to reduce taxes. For example, Atlanta Braves outfielder B.J. Upton’s $75 million deal included a $3 million signing bonus due by Dec. 31, reported CNBC.
However, the fiscal cliff is more than tax increases. It is also a reduction in discretionary federal spending, up to 10 percent. That includes programs providing, among other things, assistance to our nation’s impoverished for home heating assistance, early childhood education and nutrition programs for women and children. The White House and Congress are in negotiations to avert this looming crisis and no one knows yet if they will succeed.
While the wealthy protect their riches, it is worth remembering the poor who rely on government assistance to eat and keep warm have precious little they can do to prepare to go over the cliff. At the Greater Lawrence Community Action Council, where I am the new executive director, we see families who struggle to survive and work their way out of poverty. We are witnesses to the importance of starting education before kindergarten, of good nutrition to the health of families and a warm home in our cold, harsh winters. For too many people in Greater Lawrence, the fiscal cliff means real human suffering.
The GLCAC provides a range of federally funded social services. Last year we assisted 29,000 individuals in Greater Lawrence. The impact of a Washington stalemate on the GLCAC will amount to about a $1.6 million budget reduction (about half of Mr. Upton’s year-end bonus) and cuts in services to more than 1,200 clients in Greater Lawrence.
We estimate the cuts in federal spending based on this 10 percent will slash $505,000 in home heating assistance funds and leave 763 people in the 10 communities we serve choosing between paying their fuel bill and buying other essentials.
The looming federal cuts will chop $490,000 from our Head Start program, which equates to 50 young, high-risk children who will no longer have access to future success in school and in life.
And the GLCAC’s Women, Infants and Children nutrition and health program may serve 392 fewer mothers and children at a time in their lives when healthy eating is so critical. Many studies have shown WIC protects against troubled pregnancies and saves money in Medicaid services for newborns and their mothers -- up to $4.21 in savings for every WIC dollar spent. That means the projected $621,000 cut to GLCAC’s WIC budget will increase health care costs by as much as $2.6 million.
At GLCAC, we understand the pressure and strains the state and federal government are under to provide funding to so many worthwhile needs while not overburdening taxpayers who are dealing with a sluggish economy.
We would also hate to see an increase in the needs for our services if the fiscal cliff results in a recession and increased unemployment and poverty.
However, the real human cost of a failure to solve this crisis will not be felt inside the Beltway or on the ball fields. It will be seen in cities like Lawrence, where parents and children will be colder, lack healthy foods and get a late start on their education.
Evelyn Friedman is executive director of the Greater Lawrence Community Action Council