The so-called fiscal cliff looming on Jan. 1 will increase taxes on just about all Americans and hamper an array of federal programs. But its effect will be particularly crippling for American cities. The U.S. Conference of Mayors, a bipartisan group of 1,296 mayors who represent cities with populations above 30,000, recently called the sequestration process “perhaps the biggest threat to our metro economies.”
Which is why a clutch of mayors went to Capitol Hill last week to plead their case to Congress, in hopes of reminding lawmakers of the damage the sequestration process will wreak on municipal economies. According to the group, American cities house 84% of the nation’s population. They also provide 86% of its jobs and account for 90% of its GDP. “Cities and metro areas are the economic engines,” says Michael Nutter, the mayor of Philadelphia and president of the Conference of Mayors. “We are the economy of the United States of America.”
R.T. Rybak, the Democratic mayor of Minneapolis, says Congress doesn’t recognize the local impact of sequestration. In Minneapolis, the process will result in cuts to crucial social programs like domestic-abuse prevention and immunizations for children, Rybak says — which, in turn, will lead to higher costs for police and hospitals. “Too often,” he says, “a line-item cut in Washington one year will lead to an expense in a city the years after.”
Scott Smith, the Republican mayor of Mesa, Ariz., is worried how to keep municipal bonds tax-exempt. If that is eliminated, he says, it will raise the city’s borrowing costs for investments and curtail its ability to carry out crucial projects. “It not only hurts quality of service, but also is a job killer,” Smith says.
The across-the-board cuts mandated by the sequestration agreement pose a challenge for mayors and locals, who are forced to prioritize essential services. “What the federal government seems to be saying is, Everyone needs to get a haircut, without any sense of what the national priorities are, or any sense of whether you can treat these investments as equal, either in their impact in the short term or in the long term,” says Bruce Katz, the director of the Metropolitan Policy Program at the Brookings Institution.
According to Katz, the most immediate priority will be navigating a looming $325 million cut to the Department of Housing and Urban Development’s public-housing fund. The National Low Income Housing Coalition reports that more than 140,000 families, including those that are elderly and disabled, would have difficulty maintaining their homes after the sequester. But even less pressing cuts will exert a significant long-term impact. For example, a $463 million cut to the $5.6 billion National Science Foundation program would, over time, “undermine the ability of the country to compete globally,” Katz says. Cuts to the program would disproportionally impact cities, which tend to house research-and-development centers.
(VIDEO: TIME Explains: The Fiscal Cliff)
To address these and other concerns, the contingent of mayors met last week in the Roosevelt Room of the White House with Vice President Joe Biden, and on Capitol Hill with House minority leader Nancy Pelosi and Senate majority leader Harry Reid. They also reached out to top Congressional Republicans, but were unable to arrange a meeting. Neither House Speaker John Boehner’s nor Senate minority leader Mitch McConnell’s offices responded to a request for comment from TIME.
Like members of Congress, the mayors are clear about the problems the fiscal cliff will create, but short on answers. Smith, the Republican mayor from Mesa, says that “we need to find sources of new revenue,” which Congressional Republicans have acknowledged. Democratic mayors Nutter and Rybak asked for a “balanced approach” to deficit reduction, but didn’t say what programs they would be willing to cut.
One place where Republicans and Democrats could find new revenue is from a cap on itemized deductions. Katz, who worked for the Clinton Administration, believes that Mitt Romney’s suggestion for a cap on mortgage interest and charitable contributions was “one of the most sensible proposals put forth in the entire campaign,” and could be used to fund long-term research and development investments. Last week Senator Kent Conrad, chairman of the Senate Budget Committee and a North Dakota Democrat, said the deductions cap has “renewed interest.”
Whether or not such a proposal is part of the solution, it’s clear that Congress must find a way to avert a disaster that would devastate U.S. cities. Going over the fiscal cliff, Katz says, would be “the antithesis of governing.”