Manufacturers Remind President and Congress of True Impact of Fiscal Cliff
6 Million Jobs, Massive GDP Loss at Risk for U.S. Economy
National Association of Manufacturers (NAM) Senior Vice President of Policy and Government Relations Aric Newhouse sent a letter to President Obama, Senate Majority Leader Harry Reid (D-NV) and Speaker of the House John Boehner (R-OH) reminding them of the impact going over the fiscal cliff will have on the U.S. economy. The NAM study Fiscal Shock: America’s Economic Crisis paints a stark picture of what is to be expected. Excerpts of the letter follow below along with a link to the full text.
“This study concludes that the looming fiscal cliff already has cut nearly 1 percentage point from GDP growth this year. Looking ahead, the report finds that falling off the fiscal cliff will result in a loss of almost 6 million jobs by 2014 and an additional cumulative GDP loss of 12.8 percent through 2015. In addition, it finds that falling off the cliff would delay economic recovery by another 10 years after that. A second NAM study found that 1 million defense manufacturing jobs would be lost as a result of sequestration.
The pending fiscal crisis is weighing heavily on the minds of manufacturers, especially for the two-thirds of manufacturers that are organized as S-corporations and pay taxes at the individual rate. A NAM quarterly survey released earlier in December confirms that manufacturers are refraining from investing and hiring due to the uncertainty of the fiscal cliff. Almost 85 percent of the manufacturers responding to the survey cited this uncertainty as their top business challenge....
We urge Congress and the President to act expeditiously to avoid falling off the fiscal cliff, by enacting a pro-growth solution that encourages investment and creates jobs.”
Read the full text of the letter here.