California Could Lose if Fiscal Cliff Happens - KCOY Santa Maria, Santa Barbara, San Luis Obispo - News

California Could Lose if Fiscal Cliff Happens

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SACRAMENTO, Calif.--California could lose jobs and billions in federal funds if the fiscal cliff goes into effect.

As the December 31st deadline approaches for Congress and President Obama to reach an agreement on the federal deficit, California has a lot at stake in the decision.

If a compromise is not reached, California could lose $4.5 billion dollars in federal funds and more than 200,000 jobs next year. The cuts will be part of sequestration which means automatic spending cuts that take effect January 1, 2013.

Southern California could be hit particularly hard by cuts in military spending. The defense contracting industry pumps money into Southern California's economy. If the federal government fails to meet the deficit reduction deadline, defense contractors will have to cut down production and jobs.

Another consequence of a fiscal cliff could be cuts in Pell Grants. More than 200,000 California students would lose the benefits of federal funding for schools and universities.

 

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