TN could face steep fiscal fall - WMC Action News 5 - Memphis, Tennessee

TN could face steep fiscal fall

National Center for Policy Analysis John Goodman. National Center for Policy Analysis John Goodman.

(WMC-TV) - Tennessee could be one of the hardest hit states if there is no compromise to avoid automatic tax increases and budget cuts at the end of the year.

One study shows Tennessee is in the top five states to face serious problems.     

"A fiscal shock of that size - would send the economy toppling back into recession," said Federal Reserve Chairman Ben Bernanke.

There is so much concern because taxes are expected to shoot up on almost  everyone.

Combine that with deep and drastic cuts in budget programs, that threaten millions of jobs.

In Tennessee the worry is sequestration - the term means mandatory federal spending cuts - affecting everything from education to defense.

For Tennesseans that's $150 million in cut for programs.

"It is ensnaring a lot of middle class families," said Economist Isabel Sawhill.

For Tennessee, programs at Fort Campbell and Oak Ridge could be drastically cut,  the Women, Infant and Children nutrition program, job training and clean water grants could be affected.

Plus grants to pay for math tutors, reading coaches, after school programs and other services meant to help poor and special education students learn.

"The weakest sectors will be hit the hardest. And the weakest sectors are the sectors where people don't have very many skills," said National Center for Policy Analysis John Goodman.

Those without work next year- could receive less unemployment aid- it's all part of the fiscal cliff. adding to the need of a deal reached before the end of the year.

Copyright 2012 WMC-TV. All rights reserved.

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