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Feinstein warns about effects of 'fiscal cliff'

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POSTED October 30, 2012 9:16 p.m.

 

FRESNO  (AP) — Sen. Dianne Feinstein said on Tuesday that pending federal spending cuts could cost thousands of jobs in California.

During an address before the Maddy Institute in Fresno, the veteran Democratic lawmaker warned that the so-called "fiscal cliff" of deep federal spending cuts and tax increases looming at the end of the year would "hurt California very badly."

Citing a George Mason University study, Feinstein said California would lose 225,000 jobs in the 2012 and 2013 fiscal years, including 135,000 defense jobs.

The cuts are triggered by the sequester, an automatic package of cuts which was part of a budget compromise last year to avert a default on the federal debt. To avoid the sequester, Congress would have to come up with $1.2 trillion in alternative budget cuts by the end of this year.

If Congress fails, automatic cuts over nine years would begin on Jan. 2, 2013, with half coming from defense.

Economists have warned that the sequester cuts — combined with the scheduled expiration of the Bush tax cuts, the payroll tax, unemployment benefits and a host of other tax breaks — could lead the country back into the recession.

Barring a deal from Congress, the sequester cuts should be slashed in half, and the Bush tax cuts should be extended for people earning under $250,000, Feinstein said. She also proposed embracing a framework of long-term deficit reduction.

The senator called for bipartisanship to solve the fiscal crisis.

"What it takes to move this democracy forward is compromise," Feinstein said. "This has been a very rough two years and it must stop, because it has prevented the people's business from being done."

Feinstein's comments came a week before Election Day, when she is seeking a fourth full term. The senator has done little campaigning at a time when U.S. Senate races all over the country are being hotly contested by Democrats and Republicans fighting for control.

Her opponent, Republican political novice Elizabeth Emken, has little name recognition, money or party support — in a state where Democrats hold every statewide office and the two U.S. Senate seats, and control the Legislature.

Emken, an autism advocate and former IBM middle manager, is in her first run for statewide office. She has struggled to raise funds since she beat out 23 competitors to finish second in the June primary.

Feinstein has refused to debate Emken, despite multiple requests from her opponent for a series of face-offs.

"She has no experience and no program," Feinstein told reporters in Fresno. "She (would) throw bricks at me and you get enough of that in everyday life."

A Federal Election Commission report released in mid-October showed Emken had only about $100,000 cash on hand, but had taken on $300,000 of campaign debt.

Feinstein had $3.3 million on hand and had spent a total of $2.8 million.

Emken's campaign spokesman Mark Standriff said Feinstein should "allow Californians to compare the candidates side by side." And before talking about sequestration, Standriff said, "the senator and her fellow Democrats could get around to passing a budget, which they have avoided doing for the past three years."

But even in California's Central Valley, an agricultural heartland where Republicans still hold some sway, the senator is popular due to her support for agricultural interests.

During her speech in Fresno, Feinstein reiterated her support for Gov. Jerry Brown's plan to build two large tunnels to move water beneath the fragile Sacramento-San Joaquin delta. She also advocated for building more storage for water — including expanding existing dams and improving groundwater storage — and planning for dry years.

"Water is vital in our state," she said. "You can't have a state that has grown to 37 million people have the same water infrastructure" that it had years ago.

Feinstein, who chairs the Senate Intelligence Committee, also defended president Obama's response to the September attack on the U.S. Consulate in Benghazi, Libya, where U.S. Ambassador Chris Stevens and three other Americans died.

She said the president couldn't have known the exact details of security that day in Benghazi.

 

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