AP: Pompeo pessimistic about chances of fiscal cliff deal

12/7/2012

TOPEKA (AP) — Kansas Rep. Mike Pompeo was pessimistic Thursday about the ability of Congress and President Barack Obama to reach a deal to avoid the fiscal cliff, and the prospect of federal spending cuts worried two leaders in the Kansas Legislature.

TOPEKA (AP) — Kansas Rep. Mike Pompeo was pessimistic Thursday about the ability of Congress and President Barack Obama to reach a deal to avoid the fiscal cliff, and the prospect of federal spending cuts worried two leaders in the Kansas Legislature.

Pompeo, a conservative Wichita Republican who represents the 4th Congressional District of south-central Kansas, said he's disturbed by comments from Treasury Secretary Timothy Geithner that the Democratic president's administration will let the country go over the fiscal cliff if Republicans won't increase taxes on the wealthiest Americans. Pompeo opposes such tax increases.

Without a deal by the end of the year, taxes are scheduled to rise automatically and spending is set to drop to help narrow the federal government's budget deficit. Economists and many officials believe the combination will stall the economy.

"The two sides are incredibly far apart," Pompeo said during a telephone conference call with reporters. "They are absolutely fixated on raising rates on the so-called rich. It's all they'll talk about."

The prospects of federal spending cuts concerned incoming Senate Majority Leader Terry Bruce, a Hutchinson Republican, and House Minority Leader Paul Davis, a Lawrence Democrat.

"It could have a pretty disastrous impact," Davis said.

While GOP congressional leaders have agreed to raise additional revenues, they've so far rejected Obama's call to raise tax rates on income over $200,000 for individuals and $250,000 for couples. Pompeo said he'd like even deeper spending cuts than those already scheduled, though he'd lessen the defense reductions planned.

Obama's supporters believe his hand is strengthened by his recent re-election and polls showing majority support for his position on taxes. But Pompeo, who'll also start his second term in January, said voters also backed candidates like him and left Republicans with a majority in the U.S. House.

"The right path forward is smaller government, lower tax rates," Pompeo said, though he'd support eliminating deductions and simplifying the income tax code.

In Kansas, conservative Republican Gov. Sam Brownback's administration has noted that going over the fiscal cliff could create budget and economic problems for the state, without discussing specifics about how much money the state could lose from spending cuts. The state expects to receive about $3 billion in federal funds during its current fiscal year.

Legislators already face closing a projected $328 million gap between anticipated state revenues and current spending commitments for the fiscal year beginning in July 2013.

The self-inflicted budget shortfall arose after massive income state tax cuts this year, enacted to stimulate the Kansas economy. Brownback and other GOP conservatives who backed the cuts believe the budget problems will be temporary as the reductions spur job growth and economic activity, while critics believe the budget problems will linger for years. Either way, a national economic downturn triggered by the fiscal cliff could prove problematic.

Davis said he's worried the spending cuts tied to the fiscal cliff could cancel highway projects and limit social services. Bruce said he's concerned about specific programs, such as one providing nutritious meals for seniors, and believes some of the state's most vulnerable citizens face lesser services.

"I would like to see Washington — with everybody else — come to an amicable agreement," Bruce said.

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