AMHERST, Mass. (WWLP) - Fiscal 2012 ends September 30th with a federal budget deficit of $1.1 trillion dollars. The once heralded "Bush-era" tax cuts will expire soon after that. And some economists say if Congress wants to reduce the deficit, they need to spend less and tax more.
The National Associations for Business Economics surveyed 236 of its members and found 45% of respondents said spending cuts and tax increases would reduce the deficit. But some taxpayers are not behind the idea.
"We pay a certain percentage of our incomes, which are for the most part pretty low. And I think that the government should work the same way, the people that have more are taxed more," said Maureen McGrath of Hadley.
Last year, a congressional subcommittee, the so-called "gang of six," failed to reach an agreement in deficit reduction. And experts say it's that lack of compromise and uncertainty that is driving the economic climate.
"Just the uncertainty you get from the inability to reach an agreement is bad for the business climate. And especially because so many Republicans have signed off on the "no new taxes" pledge, they refuse to compromise," said Michael Lynch, president of Strategic Energy & Economic Research .
Lynch says fiscal insecurities on Capitol Hill will trickle down and ultimately affect the backbone of our economy; as more people will become cautious when making substantial financial decisions, like hiring more employees or buying a home.
The Congressional Budget Office (CBO) says not balancing the budget can lead to a bevy of potential problems, like higher interest payments on federal debt or another fiscal crisis.
"The problem with the two parties is that they're both more concerned with the politics than they are concerned with the people. We need to realize that people are really hurting in this country," said Leslie Elliot of Hadley.
The CBO says policy changes like the end of the big tax cuts could shrink the deficit in 2013 by $641 billion.