California Democratic Congressman Xavier Becerra discussed the consequences of the “fiscal cliff” on Latino families. (Photo: Kris Connor/Getty Images)

Debating the fiscal cliff’s impact on Latino families

For some, the term “fiscal cliff” is a wonky phrase thrown around cable tv world.  But it’s not an abstraction to Cynthia Rodriguez, who heads Congreso de Latinos Unidos, a multi-service non-profit in Philadelphia.

“What will Congress and the White House do to  make sure families don’t lose access to refundable tax credits, and how to make sure gains and opportunities stay intact for the neediest families?” asked Rodriguez, who says the average Latino family her agency sees makes $20,000 a year, and lives in one of the country’s poorest – and hungriest – congressional districts. Rodriguez was one of hundreds of community service professionals who participated in a conference call sponsored by the National Council of La Raza (NCLR) on the impact of the ‘fiscal cliff.’

So what is the fiscal cliff?  In essence, it boils down to this. At the end of the month, a series of  tax cuts implemented over the last few years come to an end, and at the same time, automatic spending cuts on government programs, including Medicare and Medicaid, take place.  This deadline was created to curtail government spending as the deficit has increased significantly in recent years. Currently the two parties  are at loggerheads over how to avoid this automatic deadline while curbing the deficit. The Obama administration is espousing cuts and savings in some government programs in combination with tax increases for Americans making over $250,000 a year. “The President is very focused on balanced deficit reduction,” said Jason Furman, assistant to the President on economic policy.  Furman says higher taxes are essential to accomplish this.

Republicans, on the other hand, are opposing increasing taxes on wealthier families, saying this will stifle investment and job growth, and are calling on deeper cuts to programs such as Medicaid and Medicare, saying it is the only way to rein in out-of-control spending.    “The tax hike would be hoisted on Americans at the worst possible time,” says Daniel Garza of  The Libre Initiative, an organization that promotes less government and more private-sector initiatives.  Garza says he worries that “we’re creating a Greece situation – deep entitlement reform will never happen, and it’s reckless,” he says. Florida Republican Senator Marco Rubio recently criticized President Obama’s current budget deficit reduction plan, saying “you can’t tax yourself away out of this dilemma,” and saying it is necessary to look at added spending cuts.

But California Democratic Congressman Xavier Becerra, on the NCLR conference call today, worried that many Latino families, whom he described as being in the “aspiring class of Americans – younger, a little less affluent, heavily first-time home buyers, and the first to attend or graduate college,” would be “pushed off the edge” of the middle class or the pathway to the middle class if deep cuts take place.

Almost half of U.S. Hispanics rely on social security as their sole source of retirement income, said Becerra, referring to proposed cuts and changes in Medicare eligibility. Becerra, who was the first Latino to serve on the House Ways and Means committee, Congress’ chief tax-writing body, also spoke against Republican proposals for steep cuts in Medicaid, saying this would threaten gains made under the Affordable Care Act to insure nine million more Latinos.

Julie Rodriguez, Associate Director for Latino Affairs at the White House Office of Public Engagement, said if parties don’t reach an agreement before the fiscal cliff deadline, the median Latino household earning around $43,000 a year would see taxes increase by about $2,200.  As a result, added Rodriguez, families would be spending about 200 billion less on retail, for example, an industry which employs over 2 million Latinos.

National Council of La Raza president and CEO Janet Murguia said her organization has been  meeting with legislators from both parties to discuss the fiscal cliff impact on Latino families.  Murguia pointed out, however, that in polls and in the ballot box, “Latinos favor a balanced approach to deficit reduction – this is not the time to raise taxes on working and middle-class families,” Murguia said.

In an impremedia/Latino Decisions pre-election tracking poll, 77 percent of Latinos approved of higher taxes or a combination of higher taxes and spending cuts to reduce the deficit, and 12 percent of registered Latino voters supported just spending cuts.

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