Gray ‘unnerved’ at lack of deal on ‘fiscal cliff’

December 27, 2012

D.C. Mayor Vincent C. Gray (D) warned Thursday that the District will lose $110 million if the federal government fails to avert the “fiscal cliff,” and said he’s unnerved that Congress and President Obama are deadlocked.

Speaking on Capitol Hill alongside Del. Eleanor Holmes Norton (D-D.C.), Gray warned that the loss of revenue from mandatory spending cuts as well as a lower tax revenues could cause the city’s economy to sputter if a deal isn’t made by Monday night.

“To me, its up to the Congress to solve this,” Gray said. “I was hoping the speaker would step up and strike a deal with the president. It doesn’t mater whose fault it is. It matters bringing people together to find a solution because everyone suffers. We would fall right back into a recession.”

Norton echoed Gray’s concern, saying mandatory budget cuts could cripple the region’s economy.

“This region must not let sequester happen,” said Norton, noting that it could result in thousands of job losses.

Gray said the “fiscal cliff” would cost the city an estimated $50 million in lost sales and income tax revenue. The District could also lose an estimated $60 million in federal funds, including money for the city’s popular Tuition Assistance Grant (TAG ) program that helps city students pay tuition at out-of-state universities.

But the District government is relatively flush with cash, which could soften the blow of mandatory federal spending cuts.

Last year, the District ended the year with a $140 million surplus. And two weeks ago, economist Alice Rivlin told a gathering of Washington area political leaders, including Gray, that regional fears about the impasse on Capitol Hill were overblown.

Still, Gray said Thursday that the “leaders on Capitol Hill have to understand the perils of not finding a solution to this and the potential pitfalls” facing the District.

“I never thought we would get to this,” Gray said. “It’s December 27. I thought it would be solved two or three weeks ago and it hasn’t been. I am absolutely astounded. I am disappointed, and it doesn’t speak well of our leadership.”

Tim Craig is The Post’s bureau chief in Pakistan. He has also covered conflicts in Iraq, Afghanistan and within the District of Columbia government.
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