Ed LangloisNon-profits like Catholic Charities and St. Vincent de Paul may be called upon more in the wake of fiscal cliff deals, says a University of Portland economist.
Of the Catholic Sentinel
"It's about spending now," says Brian Adams. "And the government has big debt. I think it will look to institutions like Catholic Charities to take up the slack."
The Obama administration reached a deal with congressional Republicans earlier this month that will allow taxes to rise on some of the wealthiest Americans. Adams says the next phase will be about trimming government programs. Private institutions, philanthropies and charities will probably be asked to step in.
Asked about the morality of balancing the budget by cutting programs that assist people who are poor, Adams says it's a grueling decision. But, he explained, economists often suggest fiscal plans that do the most good for the most people.
If Congress and the administration get the budget deficit under control via spending cuts, that may prevent international lenders from raising rates charged to the U.S. for loans. By contrast, if the deficit continues to grow, rates will rise. That means individual borrowers in the U.S. will also pay higher rates and many households and businesses could suffer.
Adams predicts that as the economy continues to recover, more people and businesses will seek loans, putting upward pressure on interest rates anyway.
Adams, an alumnus of UP, specializes in international finance, security regulation and analyst coverage. He has recently taken up personal and entrepreneurial finance.
He foresees debate over tax policy on the horizon. Some lawmakers want to cancel several deductions Americans can now take. Adams, for one, argues that the charitable contributions deduction should stay in place. The U.S. Catholic bishops have made a similar case. The bishops also suggest cuts to defense and direct farm subsidies instead of social programs.
Most workers have already noticed that payroll taxes have gone back to a higher rate. The taxes, which support Social Security, were reduced temporarily during the nation's economic crisis. Now that the economy is improving, Adams says, it makes sense to allow them to reset.