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What's at risk for Rhode Island if the 'fiscal cliff' is not averted?

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By Philip Marcelo

PROVIDENCE, R.I. -- With the U.S. House set to reconvene Sunday on a possible "fiscal cliff" deal, millions of dollars in federal aid driving government services and significant parts of the Rhode Island economy hang in the balance, according to recent national studies.

Nearly $19 million of the total $254 million or so in federal funding the state receives annually for social service programs for the poor, children and seniors, as well as education and job training are at risk for automatic cuts, if a deal is not reached, according to a July study commissioned by the office of U.S. Sen. Tom Harkin, chairman of the Senate Committee on Health, Education, Labor and Pensions.

The state can also expect significant reductions in federal spending on defense procurement, salaries and wages, which account for 2.8 percent of Rhode Island's gross domestic product, according to a November report by the Pew Center on States.

Those come on top of the income tax hikes all taxpayers can expect to pay in the new year, as well as the expiration of federal benefits for some on unemployment.


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