Fiscal cliff threatens California's recovery, jobs

SACRAMENTO — California's economic recovery could come to a halt if Congress and President Barack Obama are unable to avert the "fiscal cliff," business and government officials warned Friday.

Robert Kleinhenz, chief economist at the Los Angeles County Economic Development Corp., said automatic spending cuts would represent a loss of $22.7 billion in gross state product, the annual measure of goods and services produced in the state. It would also mean the loss of 225,000 jobs statewide, he said.

Expiring Bush-era tax cuts and the end of a payroll tax holiday will also mean smaller paychecks for workers at a time when the nation is barely recovering from the Great Recession.

"This is a timing problem. If the Congress can work out the timing, maybe space out some of these adjustments over the next couple of years, than we would not endanger this recovery," Kleinhenz said.

Another group that would feel the pinch at the start of 2013 is the unemployed.

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