Taxes May Rise to Avert Fiscal Cliff, Corbett Says

Pennsylvania Governor Tom Corbett, a first-term Republican, said federal taxes may rise if lawmakers in Washington head off automatic spending cuts next month.

“I don’t think they can resolve it without an increase in some taxes, but they have to counterbalance it with entitlement reform and with fraud, abuse and waste reform,” Corbett said today on Bloomberg Television’s “Market Makers” show with Stephanie Ruhle and Erik Schatzker.

Speaker John Boehner, an Ohio Republican who leads the U.S. House of Representatives, and President Barack Obama, a Democrat, have been unable to strike a bargain on averting the more than $600 billion in tax increases and spending cuts that has been described as a fiscal cliff for the nation. In Pennsylvania, federal aid would be reduced by $300 million, the state’s budget office said yesterday.

“It’s going to have an effect across the board,” Corbett said during the appearance from Bloomberg News headquarters in New York.

The cuts would take $33 million from special education, Corbett said. They would also curb $19 million in aid for women and infants, reducing the number of recipients by 20,000, he said. And it would lower the number of meals for older residents by 1 million, he said.

Corbett has pledged not to raise taxes and has “no intention of violating” that promise, he said.

To contact the reporter on this story: Romy Varghese in Philadelphia at rvarghese8@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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