>> >>PEGGY: THE FINANCIAL CLIFF IS THE TITLE OF A POLICY REPORT FROM NATIONAL UNIVERSITY
INSTITUTE OF POLICY RESEARCH. THE BRIEF WARNS IF CONGRESS CAN'T AGREE ON
HOW TO EXTEND THE BUSH ERA TAX FUNDS, SAN DIEGO WILL LOSE NEARLY SIX BILLION DOLLARS.
HERE TO Y HELP PUT THE WARNING IN CONTEXT IS CARL LUNA POLITICAL SCIENCE, AND ERIK BRUVOLD.
THANK YOU BOTH FOR BEING HERE. ERIK, I HAVE TO ASK YOU, WHEN IT COMES BEFORE
WE GET TO THE SPECIFICS OF WHAT THIS ACTUALLY IS, HOW DID YOU GATHER THE DATA, WHAT WAS
THE DATA THAT YOU GATHERED FOR THIS PROJECTION? >> >>: WE LOOKED AT SEVERAL SPENDING, AND
THEN WE LOOKED AT SAN DIEGO INCOMES AND HOW THAT SORT F DISTRIBUTED ALONG THE REGION F
WE BUILT A MODEL FOR HOW THE TAXES WOULD APPLY AND THEN CALCULATED THOSE OUT IN DEFENSE,
NON DEFENSE AND THE EXPIRATION OF THE TAX CUTS AND WHAT IT WOULD MEAN FOR SAN DIEGO.
>> >>PEGGY: SPECIFIC TO THIS REGION. CARL, GIVE US THE BREAK DOWN OF THE TAX VISIONS
THAT ARE SET TO EXPIRE. >> >>CARL LUNA: YOU'RE GOING TO SEE A CHANGE
IN CAPITAL GAINS, INCOME LEVELS, TAXES GO UP, AND IT'S GOING TO BE PAIN ACROSS THE BOARD.
>> >>PEGGY: ERIK, SO THE REPORT WARNS THAT SAN DIEGO WILL ACTUALLY BE PUSH UNDER TO EITHER
ANOTHER RECESSION OR BACK INTO A DEEP RECESSION AGAIN.
EXPLAIN THAT NUMBER WISE, HOW COME? >> >>ERIK BRUVOLD: WE IN OUR REGION, WE OUR
ECONOMY GREW SOMEWHERE ABOUT SIX TO SEVEN BILLION DOLLARS.
IN DIRECT IMPACT FROM FALLING OFF THE CLIFF WOULD BE ABOUT AN IMPACT OF SOMEWHERE BETWEEN
4.3 AND $5.9 BILLION. BUT THAT DOESN'T INCLUDE ANY OF THE MULTIPLIERS
THAT ECONOMISTS LOOK AT WHEN MONEY CIRCULATES THROUGHOUT THE ECONOMY.
WE'D BE LOOKING AT PROBABLY 20 TO 30,000 IN TERMS OF JOB LOSSES, PROBABLY NEGATIVE GROWTH
FOR AT LEAST TWO QUARTERS F NOT THREE QUARTERS IN 2013 T.WOULD FEEL AS BAD AS THE FINANCIAL
CRISIS IN 2008 IN SAN DIEGO. >> >>PEGGY: WHAT ABOUT SPECIFICALLY FOR OUR
DEFENSE INDUSTRY HERE, WHICH IS HUGE. IS THAT INCLUDED IN THOSE NUMBERS?
>> >>ERIK BRUVOLD: ABSOLUTELY. SO THE WAY THIS WORKS IS IF THEY DON'T REACH
AN AGREEMENT BY JANUARY FIRST, THERE ARE ACROSS THE BOARD CUTS THAT ARE GOING TO BE MADE.
THE PRESIDENT ANNOUNCED HE'S GOING FOCUS ON DEFENSE CONTRACTS NOT ON SALARY AND BENEFITS
TO MILITARY PERSON EL. WE ESTIMATE THE SAN DIEGO IMPACT WOULD BE
ANYWHERE BETWEEN 1.1 AND $1.7 BILLION IF THOSE CUTS COME THROUGH.
>> >>PEGGY: GETTING BACK TO THE FEDERAL STALEMATE THAT SORT OF PUT INTO PLATES, CARL, HOW WAS
THIS SET UP AND IS THIS EXPIRATION DATE NEGOTIABLE? >> >>CARL LUNA: ANYTHING'S NEGOTIABLE AT SOME
POINT. RIGHT NOW TO RAISE THE DEBT SEAL, THEY MADE
A PACT WITH THE DEVIL IF THEY DID NOT WORK OUT SUBSTANTIAL REDUCTIONS IN THE DEFICIT
BY JANUARY FIRST OF NEXT YEAR, AUTOMATIC CUTS OF SPENDING, TAXES, GO AWAY, AND TAXES GO
UP. ALL THAT WAS SUPPOSED TO HAPPEN.
WITH THAT GUN TO THEIR HEAD, THAT WOULD MAKE THEM ACTUALLY MAKE A DEAL.
THERE'S A POSSIBILITY THEY MAY TAKE A BULLET. >> >>PEGGY: THEY'RE CERTAINLY NOT GOING TO
DO WHAT I THINK YOU SAID BEFORE THE ELECTION,. >> >>CARL LUNA: YOU COULD SEE THEM LET THE
TAX CUTS EXPIRE ON JANUARY 1 AND COME UP WITH SOME LAST MINUTE DEAL.
THEY'RE PLAYING A KIND OF A TIGHT ROPE GAME HERE, SO IT'S GEEING TO BE A QUESTIONABLE
OUTCOME. WHICH SIDE'S GOING TO BLINK, WILL THEY MAKE
SOME SORT OF A COMPROMISE. THIS CONNING DOES NOT LIKE COMPROMISE.
>> >>PEGGY: LET'S GET DOWN TO WHAT'S IMPORTANT FOR VIEWERS HERE.
WHAT ARE WE LIKELY TO EXPERIENCE IF THIS EXPIRE COMES JANUARY SECOND, AND THE AVERAGE FAMILY
IN SAN DIEGO. >> >>ERIK BRUVOLD: THE FIRST THING SAN DIEGAN
FAMILIES WILL NOTICE IS THEY WILL HAVE MORE MONEY WITHHELD FROM THEIR TAXES AS THE IRS
PUTS MORE TAX TABLES INTO PLACE. IF YOU WORK FOR DEDPENS CONTRACTORS YOU'LL
PROBABLY SEE AN IMMEDIATE SLOW DOWN, MAYBE BEFORE THE FIRST OF THE YEAR.
AND AS THAT RIPPLES THROUGH THE ECONOMY, IT'S GOING TO IMPACT EVERY SAN DIEGAN, FROM THOSE
IN THE UPPER TWO% HIGHER INCOME TAXES TO PEOPLE RUNNING A CORNER GROCERY, SEEING LESS CUSTOMERS.
>> >>PEGGY: WHAT ABOUT YOU, CARL? >> >>CARL LUNA: I THINK IT WILL REDUCE DISCRETIONARY
SPENDING. THIS WILL COME INTO PLACE RIGHT AFTER THE
HOLIDAYS, PEOPLE WILL BE EASING OFF ON THE HOLIDAY SHOPPING.
IT'S GOING TO HURT GOVERNMENT, THE PAIN IS GOING TO BE EVERYWHERE.
>> >>PEGGY: OKAY, WELL THERE'S A LOT MORE ABOUT THIS ON OUR WEBSITE.
WE'VE RUN OUT OF TIME. ERIK BRUVOLD AND CARL LUNA, THANK YOU FOR
BEING HERE.