What the Fiscal Cliff Debate Means For Latinos

What the Fiscal Cliff Debate Means For Latinos


Talks of the fiscal cliff continue to escalate, and the Obama administration is leading a strong PR campaign telling the American public to call, write, or even Tweet members of Congress. The White House wants citizens to pressure Republican representatives to pass a tax increase on the wealthy and avoid cuts on federal programs.

All Americans will be affected if an agreement isn’t reached by January 1, but one group who may face the toughest hardships are the families largely responsible for putting the president back in office: Latinos.

On Wednesday, December 5, the White House held a telephone conference with the country’s largest Hispanic civil rights and advocacy group, the National Council of La Raza (NCLR).

During the call, Janet Murgia, President and CEO of NCLR said, “We need to protect the most vulnerable among us in this process… balancing the budget on the backs of poor, working and middle-class families will only succeed in broadening the opportunity and achievement gaps that exist for many communities.”

The Associate Director for Latino Affairs at the White House Office of Public Engagement, Julie Rodriguez, said the average Latino family holding an annual income of $43,000 could face a $2,200 tax hike.

She believes this increase in taxes could result in families spending about 200 billion less on retail goods, an industry employing over 2 million Latinos.

In a statement released Friday, Cecilia Muñoz, White House Director of the Domestic Policy Council said, “The fact is Hispanic-American families just can’t afford tax increases right now, but that’s what will happen if Congress fails to act.”

“An astounding 99 percent of Hispanic families will be affected,” she said.

Eliminating government programs will put unemployment benefits at risk.

As of October, the national unemployment rate stood at 7.9 percent, according to the Bureau of Labor Statistics. When it comes to Latinos, 10 percent of Hispanics are without a job and 27.8 percent hover above the poverty line.

NCLR warns that the fiscal cliff could “return the unemployment rate to more than 9 percent nationally … Latinos face an unemployment rate of 10 percent and cannot afford reckless actions that threaten to drag our economy back into recession.”

In a press release, NCLR showed concern for proposed spending cuts stating, “NCLR Affiliates provide fundamental services that educate, feed and treat our children, train our workers, open the doors to homeownership, stave off foreclosure and secure other human services. We have witnessed the serious impact of past major budget cuts…and we fear that many may once again have to abruptly end programs or close their doors altogether.”

Programs at risk of federal spending cuts include workforce-development programs, early child care funding such as WIC and Head Start, as well as housing assistance programs — all institutions a significant number of Latinos partake in.

If the fiscal cliff is reached, education funding may also suffer cuts. This could affect a large number of Latinos who relay on student loans to pay for college. In 2008, 67 percent of Latinos completed their bachelor’s degree with student debt, compared to 64 percent of white Americans.

Republicans are also advocating for cuts into Social Security, Medicaid and Medicare.

Democratic Congressman Xavier Becerra told VOXXI News this could be highly detrimental to the Latino community because almost half of U.S. Hispanics rely on social security and Medicare as their only source of retirement aid.

Cutting into Medicaid would affect Latinos who currently make up 29 percent of the programs enrolees and according to Becerra, it could put in danger benefits made under the Affordable Care Act to insure nine million Latinos.

But Becerra is optimistic.

“While we confront those who say the sky is falling, the reality is we for the longest time have kept the sky above America and we’re going to continue to do it,” he told VOXXI.

Murgia, of NCLR, has said, “Latinos favor a balanced approach to deficit reduction.”

In a pre-election tracking poll performed by impremedia/Latino Decisions, 77 percent of Latinos approved of higher taxes or a combination of higher taxes and spending cuts to reduce the deficit.”