With the "fiscal cliff" deadline
less than three weeks away, more Californians begin to worry about
its serious impact on the Golden State's economy and their
retirement benefits.
The California Legislative Analyst Office (LAO) estimated that
the state could lose more than 200,000 jobs and as much as 4.5
billion dollars in federal funds while the state budget might shrink
by 11 billion dollars over two years.
"Most people think the economy would be drawn into a recession
and just like in any recession, that would effect the state's
economy and revenues and result in billions of dollars of less tax
revenue for the state," said Jason Sisney, spokesman for the LAO.
Southern California, home to most high-value contracts, would be
hit especially hard by spending cuts expected to cost 135,000 jobs
next year.
Programs for low-income families, which rely on federal funding,
could also see their services cut.
Robert Kleinhenz, chief economist at the Los Angeles County
Economic Development Corp., told the press that automatic spending
cuts would represent a loss of 22.7 billion dollars in gross state
product, the annual measure of goods and services produced in the
state.
As Washington is considering cramming changes to Medicare and
Social Security, Californians, especially the senior and retired,
are more upset.
A report by the American Association of Retired Persons (AARP)
shows how a last-minute budget deal could affect millions of
Californian seniors.
Currently, nearly 3.7 million seniors receive Social Security
benefits at an annual average of 13,800 dollars in California, where
Social Security makes up about 52 percent of the typical older
citizen's income and these benefits keep 28 percent beneficiaries
out of poverty, according to AARP.
"Millions of people who worked hard for years to earn these
benefits deserve better than to get pushed over this fiscal cliff.
Social Security is not a cause of the budget deficit and it
therefore shouldn't be used to resolve it," AARP California State
Director Katie Hirning said.
More retirees are concerned about Medicare, which covers roughly
4.1 million Californians who averagely spend 15 percent of their
income (approximately 4,000 dollars) on out-of-pocket medical
expenses each year, according to AARP.
In 2011, Medicare spent an estimated 33.4 billion dollars on
health care services in California. If Congress raises the Medicare
eligibility age from 65 to 67, more than 580,000 Californians would
be without health coverage and forced into the private insurance
market at an estimated additional cost of 2,200 dollars per year,
AARP said.
"Raising the Medicare eligibility age would dramatically increase
out-of-pocket costs for recently retired and soon-to-retire seniors,
drive up premiums for those already enrolled in Medicare, and
increase overall health care costs," said Hirning.
"Instead of solving problems, these kinds of changes would create
even more of them, while further damaging the retirement security of
millions of people," Hirning added.
AARP said it looks forward to working with legislators on
proposals that strengthen Social Security and Medicare for all
generations, but not by cramming changes to these vital programs
into a last-minute deal that could harm all of them.
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