Local small businesses, conservatives critical of 'fiscal cliff' fix
Updated On: Jan 03 2013 04:44:31 AM CST
Congress may have approved a deal to stop the dreaded "fiscal cliff," but it's only a temporary fix. The deal delays decisions on major spending cuts for another two months. Some small businesses say that uncertainty keeps them in limbo, and will cause them to hold off on hiring.
At Dynalene in Whitehall Twp., Lehigh Co., their slogan is, "Solutions Flow Through Us." That's because the company creates fluids that transfer heat.
"A lot of the manufacturers need to heat and cool their processes," said company chairman Daniel Loitkis.
About 15 people work at Dynalene. Plans to hire more are on hold, even though the company is sitting on cash.
"We're going to be investing in certain products that we have to," said Loitkis, "but not taking any risk ventures right now."
Loitkis believes expanding is too risky right now.
Although Congress passed a temporary "fiscal cliff" fix, it doesn't include major cuts to balance the budget.
"In two months, we're going to be right back where we are right now, and nothing is settled," said Barbara Walters with the Lehigh Valley Tea Party.
The conservative Tea Party rose to prominence fighting tax increases of any kind. Although the fiscal cliff agreement raises taxes on the wealthy, Walters brushed off suggestions that her group's influence is declining.
"I don't think it's a bad sign," said Walters. "I think what it does is, that it makes us feel that we are needed. If we go away, what's going to take our place? Who's going to say, 'No more taxes?'"
Even Sen. Pat Toomey, R - Pennsylvania, a staunch tax opponent, voted for the fix -- and the upper-income tax hike that came with it.
"There's lots not to like in this deal, but I just couldn't sit by and allow a huge [middle-class] tax increase to go into effect," he said.
Moving forward though, Toomey is promising a fight on spending cuts.
"Pretty soon, the President is going to want to increase his borrowing authority, the debt limit," said Toomey. "I say, we can't give him that authority unless he's willing to demonstrate the real reforms."
Toomey wants major changes to the way Medicare and Social Security are funded, but has opposed military cutbacks.
In a White House news conference, President Obama said he wanted a bigger deal that would have addressed spending cuts immediately.
"The fact is the deficit is still too high," Obama said. "Unfortunately, there just wasn't enough support or time for that kind of large agreement in a lame duck session of Congress."
Meantime, back at Dynalene, Loitkis said major investment is on hold as he worries about a European-style debt crisis.
"I stay up at night sometimes," he said. "Sooner or later, the fiscal cliff is going to happen again, and we're not going to be able to solve it."
If the markets are any indication though, the agreement is a good step in the right direction. Stocks surged 308 points on Wednesday, after gaining 167 points on New Year's Eve.
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