Local leaders speak out on US economy

BUFFALO, N.Y. (WIVB) - We didn’t fall off the ‘fiscal cliff,’ but now concerns are turning to a new deadline, the nation’s debt limit.

“This is just short term, I think what American businesses need and what individuals need, is clarity and certainty for the long term,” said Congressman Brian Higgins.

The bill extends Bush-era tax rates for every American making less than $400,000, and couples who make less than $450,000.

“We need to grow this economy and what we have is a spending problem, because we have a demographic problem, and that is people are living longer and are more dependent on government programs and thus we need economic growth in order to pay for those kinds of things,” Higgins said.

Despite the deal, expect your paycheck to shrink. Middle class Americans won’t pay higher income taxes but they will have to pay at least two percent more in payroll taxes. That means most of the country’s 160 million workers will see smaller paychecks this year.

To put it in perspective, Americans earning $30,000 a year will take home $50 less per month.

Now concerns turn to the debt ceiling. President Obama said, "The consequences for the entire global economy would be catastrophic, far worse than the impact of a fiscal cliff."

Higgins said, “The last thing we want to do in this nation is default on our debt. But, some in Congress use this as leverage to extract other things that they want, and it's highly reckless and irresponsible because it does real and permanent damage to the US economy.”

Congressman Brian Higgins says if an agreement over the debt ceiling isn’t reached soon, it could mean an increased rate of borrowing for everyone.

“Stop playing games with the American economy, stop playing games with the financial market, sit down in a rigorous way and come up with solutions,” said Higgins.

News 4 received a statement from Congressman Tom Reed that says in part, "I still believe the answer lies in cutting spending and reforming Medicare and Social Security to save it for generations to come. Sooner or later, we will have to address these issues and I for one support doing this as soon as possible."

News 4 also reached out to Congressman - Elect Chris Collins for comment, but haven’t yet heard back from him.