Thursday December 13, 2012

CONCORD, N.H. -- New Hampshire’s top elected officials are keeping a close and wary eye on the struggles in Washington to avert a looming "fiscal cliff" of automatic spending cuts and tax increases.

They say federal spending cuts could make an already lean state budget leaner, hurt New Hampshire defense contractors and increase unemployment.

"There’s really not a lot we can do. We’re at the mercy of the federal government," Senate Republican Leader Jeb Bradley said Wednesday.

The uncertainty over federal spending decisions will make writing a new two-year state budget much more difficult, said Bradley, of Wolfeboro.

"Obviously, whatever they do about the fiscal cliff will have some kind of impact on every state because it will affect our federal financial aid. That’s the biggest thing -- the money," said Democratic House Speaker Terie Norelli, who also is president of the National Conference of State Legislatures.

Norelli, of Portsmouth, led a delegation of NCSL members representing eight states to Washington last week to meet with White House officials and urge them to consider states’ needs when making spending decisions.

"We told them to think big and put everything on the table," Norelli said.

Even if federal lawmakers avoid the cliff, cuts will be made to deal with the deficit, she said.


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"There is no doubt whatever they do come up with, the states will end up with a share of the cuts," she said.

Bradley said uncertainty over federal aid could affect the state’s decision on whether to expand Medicaid under the Affordable Care Act.

"I have no idea if the federal government is going to keep the commitment that has been made," Bradley said.

Marc Goldberg, spokesman for Gov.-elect Maggie Hassan, said she considered the uncertainty in issuing instructions to state agencies to submit budgets below this year’s spending levels for next year and at this year’s level for 2015.

U.S. Sen. Kelly Ayotte, R-N.H., hopes a deal can be reached that reduces the deficit and prevents massive tax hikes.

"Such an agreement should rein in federal spending, preserve entitlement programs, and put our country on a fiscally sustainable path," Ayotte said in an email to The Associated Press.

At the least, Congress needs to extend the tax cuts for the middle class and address the across-the-board cuts known as sequestration by the end of the year, said U.S. Sen. Jeanne Shaheen, D-N.H.

"I have called repeatedly for a balanced, bipartisan deal that cuts spending -- including domestic, defense and mandatory programs -- and that increases revenues to get us to the $4 trillion in deficit reduction that we need. Time is running out, and people want us to set partisanship aside, sit down and get this done," Shaheen said in an email to the AP.

David Pastor, owner of Fletcher’s Appliance in Nashua, is worried people will stop spending if the crisis is not resolved and that taxes will rise. Pastor said both sides are at fault and both sides have to compromise.

"Bottom line: it’s about America and keeping people working that are working, and getting jobs for people who aren’t working. And by letting this thing slide and nothing happening, neither of those things are going to happen," he said.