What The Fiscal Cliff Means for New York, Pt. 2



Yesterday, Senate Majority Leader Harry Reid admitted his cynicism towards a fiscal cliff compromise, blaming the House Republicans’ “dictatorship.” The New York Post’s cover featured a diver jumping off a cliff, with the catchy headline “This Fall Is Really Going to Hurt.” We later found out that a handful of legislators aren’t even back in Washington yet.

Basically, the morale level is pretty low right now for something serious to get done in less than a week.

Unfortunately, a few weeks ago, we collected the New York-only consequences from a failure to solve this impending “crisis.” They included: a $43 billion tax increase for 8.9 million working Americans; 3.4 million people now forced to pay the federal alternative minimum tax; a drop of $609 million in funds for Albany; and a loss of $164 million for our schools. New Year’s Eve wasn’t supposed to hurt this badly.
Hopefully, you’re sitting somewhere near a stress ball while reading this. And, after you’re done, make sure you buy another one because we have two more major things to add to this list: a huge blow to unemployment benefits and Hurricane Sandy recovery funds.
According to Gothamist, 200,000 New Yorkers will lose their unemployment benefits on January 1. That huge number makes up nearly a tenth of the nationwide amount — the only other state with more residents collecting this insurance is good ol’ California. If our elected representatives were to save face a bit here, they’d have to scrap together $30 billion. And, in the Big Picture, it doesn’t look like that’ll happen, providing us with a perfect segue way into our next national grief.
The Hurricane Sandy recovery package barely moving its way through Congress right now is worth $60.4 billion. Transportation officials are literally waiting on this money to mitigate costs but, as luck provides, the attempt to obtain funds could not have come at a worse time. It’s like trying to fix up a tiny hole in an enormous floodgate.
Yesterday, former Bloomberg administrator and current HUD Secretary Shaun Donovan told the Daily News that relief for the thousands of victims across the Tristate area were lost in a “nightmare of inaction and limbo that is completely unacceptable.” According to Mr. Donovan, this nightmare is due in part to the aforementioned ‘dictatorship’ in the House of Representatives; the HUD Secretary is sure the full package will pass the Democratic Senate but the budget-weary Republican House is a whole other story. These guys won’t give in on tax cuts for the wealthy, let alone $60 billion for an area most of the House Republicans have probably never visited.
That leaves us with five days or so before any of this actually happens. The Sandy relief package underlies another argument; its legislative faith depends on whether or not an agreement on a much bigger situation can be met. A whole lot for New Yorkers rides on what happens between today and Tuesday. We’ll leave it at that.