Deficit To Get Millions Worse In Future, Reading City Council Told

A 1947 topographic map of the Reading, Pennsyl...

A 1947 topographic map of the Reading, Pennsylvania area. (Photo credit: Wikipedia)

City Controller Christian Zale on Monday pressed his case, again, to City Council: Unless the city makes some drastic changes, it’s facing a $35 million cumulative deficit by 2017.

However, those changes can’t include bigger property tax hikes; Zale said his projection already assumes the city raises the property tax by 5 percent in each of the next four years.

But he said the tax increases cut the deficit by only $10 million.  Without them, the deficit rises to $45 million.

“Me being conservative, I tried to be as gloomy as I could,” Zale told council.  “And quite frankly, I don’t want to hear (that) we’ll approach that and try to solve it when that time comes.”

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Delays Hit Major Airports As Control Tower Furloughs Kick In

Seal of the United States Federal Aviation Adm...

Seal of the United States Federal Aviation Administration. (Photo credit: Wikipedia)

NEW YORK (Reuters) – Travelers waited more than an hour for flights in New York and experienced delays at other U.S. airports on Sunday evening as furloughs of air traffic controllers began, reducing the ability of busy hubs to handle arrivals and departures, the Federal Aviation Administration said.

The furloughs that started Sunday reduced staffing by 10 percent across the country.  Last week the FAA warned of delays up to 3-1/2 hours at some airports as the agency cuts spending to meet reductions required under federal budget cuts.

New York’s LaGuardia and John F. Kennedy airports reported delays of more than an hour, and Philadelphia international airport also reported delays due to furloughs, the FAA said.

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The Real Fiscal Cliff: The 4.8 Million Long-Term Unemployed

Today’s alarming financial news is the rise in first-time unemployment claims to 385,000, up 28,000 and also above expectations.  The U.S. Labor Department report shows the labor market is weakening, not that it was anything resembling strong in the first place.  It makes me want to cry, because every piece of news like this makes me even more distraught about the future of the 4.8 million long-term unemployed.

I’ve covered unemployment issues or more than a decade and the future for those who are out of work beyond the normal six months funded by state benefits is very bleak.  These aren’t lazy bums, but desperate people who are financially and emotionally devastated by their situation.

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Families In Berks County Now Must Learn To Manage A Tax Hike

The U.S. economy survived the plunge off the so-called fiscal cliff only to find itself in hot water.

A last-minute tax hike rescue by a reluctant Congress meant there was no room in the legislative lifeboat for addressing the debt-ceiling fix, spending cuts or the deficit.

An increase in wage taxes was ballast for the end of Bush-era tax cuts for the wealthy.

The biggest hit to Berks County residents and small-business owners comes in the form of the 2 percent wage-tax hike, which translates to a cost of about $1,000 for the average family.

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House, Senate Approve ‘Fiscal Cliff’ Bill

Official portrait of United States House Speak...

Official portrait of United States House Speaker (R-Ohio). (Photo credit: Wikipedia)

Editor’s note:  Well it’s about damn time!

WASHINGTON — Congress’ excruciating, extraordinary New Year’s Day approval of a compromise averting a prolonged tumble off the fiscal cliff hands President Barack Obama most of the tax boosts on the rich that he campaigned on.  It also prevents House Republicans from facing blame for blocking tax cuts for most American households, though most GOP lawmakers parted ways with Speaker John Boehner and opposed the measure.

Passage also lays the groundwork for future battles between the two sides over federal spending and debt.

Capping a holiday season political spectacle that featured enough high and low notes for a Broadway musical, the GOP-run House voted final approval for the measure by 257-167 late Tuesday.  That came after the Democratic-led Senate used a wee-hours 89-8 roll call to assent to the bill, belying the partisan brinkmanship that colored much of the path to the final deal.

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Senate Approves “Fiscal Cliff” Deal, Crisis Eased

WASHINGTON (Reuters) – The Senate moved the U.S. economy back from the edge of a “fiscal cliff” on Tuesday, voting to avoid imminent tax hikes and spending cuts in a bipartisan deal that could still face stiff challenges in the House of Representatives.

In a rare New Year’s session at around 2 a.m. EST (0700 GMT), senators voted 89-8 to raise some taxes on the wealthy while making permanent low tax rates on the middle class that have been in place for a decade.

But the measure did little to rein in huge annual budget deficits that have helped push the U.S. debt to $16.4 trillion.

The agreement came too late for Congress to meet its own deadline of New Year’s Eve for passing laws to halt $600 billion in tax hikes and spending cuts which strictly speaking came into force on Tuesday.

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Progress Seen In Last-Minute ‘Fiscal Cliff’ Talks

English: President Barack Obama addresses a jo...

English: President Barack Obama addresses a joint session of the United States Congress in the chamber of the House of Representatives at the United States Capitol on 24 February 2009. Español: Presidente Barack Obama dando un discurose por una sesión conjunta del Congreso de los Estados Unidos en la cámara de la Cámara de Representantes en el Capitolio de los Estados Unidos, 24 de febrero de 2009. (Photo credit: Wikipedia)

WASHINGTON — Working against a midnight deadline, negotiators for the White House and congressional Republicans in Congress narrowed their differences today on legislation to avert across-the-board tax increases.

Congressional officials familiar with talks between Vice President Joe Biden and Senate Republican leader Mitch McConnell said one major remaining sticking point was whether to postpone spending cuts that are scheduled to begin on Jan 1.

Republicans want to replace across-the-board reductions with targeted cuts elsewhere in the budget, and the White House and Democrats were resisting.

At the same time, Democrats said the two sides were closing in on an agreement over taxes.  They said the White House had proposed blocking an increase for most Americans, while letting rates rise for individuals with incomes of $400,000 a year and $450,000 for couples, a concession from President Barack Obama’s campaign call to set the levels at $200,000 and $250,000.

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Senate Leaders To Make Last-Ditch ‘Fiscal Cliff’ Effort

WASHINGTON (Reuters) – President Barack Obama and U.S. congressional leaders agreed on Friday to make a final effort to prevent the United States from going over the “fiscal cliff,” setting off intense bargaining over Americans’ tax rates as a New Year’s Eve deadline looms.

With only days left to avoid steep tax hikes and spending cuts that could cause a recession, two Senate veterans will try to forge a deal that has eluded the White House and Congress for months.

Obama said he was “modestly optimistic” an agreement could be found.  But neither side appeared to give much ground at a White House meeting of congressional leaders on Friday.

What they did agree on was to task Harry Reid, the Democratic Senate majority leader, and Mitch McConnell, who heads the chamber’s Republican minority, with reaching a budget agreement by Sunday at the latest.

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Don’t Be Fooled By January Pay — Higher Taxes Loom

Seal of the United States Internal Revenue Ser...

Seal of the United States Internal Revenue Service. The design is the same as the Treasury seal with an IRS inscription. (Photo credit: Wikipedia)

WASHINGTON (AP) — Workers probably won’t feel the full brunt of next year’s tax increases in their January paychecks, but don’t be fooled by the temporary reprieve.

No matter what Congress does to address the year-end fiscal cliff, it’s already too late for employers to accurately withhold income taxes from January paychecks, unless all the current tax rates remain unchanged, which is an unlikely scenario.

Social Security payroll taxes are set to increase on Jan. 1, so workers should immediately feel the squeeze of a 2 percent cut in their take-home pay.  But as talks drag on over how to address other year-end tax increases, the Internal Revenue Service has delayed releasing income tax withholding tables for 2013.

As a result, employers are planning to withhold income taxes at the 2012 rates, at least for the first one or two paychecks of the year, said Michael O’Toole of the American Payroll Association.

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U.S. Unemployment Rate Falls To 7.7 Percent

WASHINGTON — The U.S. economy added 146,000 jobs in November and the unemployment rate fell to 7.7 percent, the lowest since December 2008. The government said Superstorm Sandy had only a minimal effect on the figures.

The Labor Department‘s report today offered a mixed picture of the economy.

Hiring remained steady during the storm and in the face of looming tax increases. But the government said employers added 49,000 fewer jobs in October and September than it initially estimated.

And the unemployment rate fell to a four-year low in November from 7.9 percent in October mostly because more people stopped looking for work and weren’t counted as unemployed.

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U.S. Manufacturing Down In November

Manufacturing in the U.S. unexpectedly contracted in November as orders dropped to a three-month low and exports slowed.

The Institute for Supply Management‘s factory index decreased to 49.5, the lowest since July 2009, from 51.7 a month earlier, the Tempe, Arizona-based group said today.  Economists projected the index would ease to 51.4, according to the median forecast in a Bloomberg survey.  A reading of 50 marks the dividing line between expansion and contraction.

Less corporate investment in equipment as U.S. lawmakers debate the nation’s budget, weaker orders from overseas and disturbances related to the biggest Atlantic storm in history are converging to slow manufacturing.  Eleven of the 18 industries covered in the report reported business shrank last month.

“Manufacturing has slowed down,” Joshua Dennerlein, an economist at Bank of America Corp. in New York, said before the report.  “Manufacturers have to prepare for demand down the road, and they’re not actually sure what it’s going to be.”

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Postal Service Reports Record $15.9 Billion Annual Loss

USPS service delivery truck in a residential a...

USPS service delivery truck in a residential area of San Francisco, California (Photo credit: Wikipedia)

WASHINGTON – The struggling U.S. Postal Service on Thursday reported an annual loss of a record $15.9 billion and forecast more red ink in 2013, capping a tumultuous year in which it was forced to default on billions in payments to avert bankruptcy.

The financial losses for the fiscal year ending Sept. 30 were more than triple the $5.1 billion loss in the previous year.  Having reached its borrowing limit, the mail agency is operating with little cash on hand, putting it at risk in the event of an unexpectedly large downturn in the economy.

“It’s critical that Congress do its part and pass comprehensive legislation before they adjourn this year to move the Postal Service further down the path toward financial health,” said Postmaster General Patrick Donahoe, calling the situation “our own postal fiscal cliff.”

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