PROVIDENCE, R.I. (AP) -- Rhode Island faces disastrous consequences if lawmakers in Washington can't strike a deal to avoid the combination of tax increases and spending cuts known as the fiscal cliff, state leaders and economists say.
If Congress and the president don't act by New Year's Day, the automatic tax hikes and spending cuts will go into effect. In Rhode Island, that could mean reduced spending on military contracts, university research and social service programs. Schools could lose more than $3.2 million in special education funding. Grants that pay for breast cancer screening, childhood vaccines, AIDS and child care subsidies could be reduced.
And virtually everyone would see taxes go up, eating into discretionary household spending and possibly stifling the state's nascent economic recovery.
"If we go off the cliff -- and stay off the cliff -- it would really hurt Rhode Island," said University of Rhode Island economist Leonard Lardaro. "The national economy would go into recession. We'd go into recession."