Our area’s own fiscal cliff

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As the nasty rhetoric and sputtering negotiations finally began leading toward a deal this week in Congress, ending the government shutdown and averting a potentially larger financial trauma over the federal debt ceiling, you could sense a huge exhale of relief across much of Colorado Springs and the Pikes Peak region.

Nobody was saying so, but we were on the verge of a serious economic setback, focused on our own market. We’ll continue to feel the effects of the shutdown and sequestration in weeks and months to come, but it was close to becoming much, much worse.

Those media reports from two weeks ago, carried by such major outlets as the Washington Post and the Wall Street Journal, did not exaggerate in labeling Colorado Springs as the No. 1 city most impacted by the government shutting down. We were singled out because of our sprawling military presence, along with the thousands of civilian support personnel, the many large and small defense contractors and the hundreds (if not thousands) of other local companies that depend heavily on the military installations to give them business.

This does not mean, however, that Colorado Springs is out of the woods.

Every aspect of that mixture was being squeezed. You wouldn’t be wrong to call it Colorado Springs’ version of a highly localized fiscal cliff.

We’re not just talking about the Army and Air Force, either. As many Business Journal readers saw several weeks ago in a story package on local manufacturer Spectranetics (“Local CEO: Excise tax hampers innovation,” Focus, Sept. 20), the medical devices tax included in the Affordable Care Act is posing a major, unintended threat to many companies. That added tax on devices wasn’t part of the deal to end the shutdown, but it’s likely to be a useful negotiating tool as the Senate and House leaders pursue the next budget deal.

Meanwhile, the military has the go-ahead to resume normal operations. This does not mean, however, that Colorado Springs is out of the woods. Our military entities, including the defense contractors, stand to be impacted negatively again and again in the future unless Congress does something about revising or removing sequestration.

Those continuing automatic budget cuts for the military, impacting every component of the Department of Defense structure, were never intended to become reality despite being part of the infamous fiscal-cliff deal of 2011. But when no other agreement could be reached, those cuts began taking place and haven’t stopped.

This situation, particularly the military-related factors, has put U.S. Rep. Doug Lamborn of Colorado Springs in a tough spot. He’s obviously for budget cuts but against military cuts, especially the sweeping kind without giving the Pentagon a chance to pick and choose which areas to trim. As a member of the House Armed Services Committee (along with Rep. Mike Coffman of Denver), Lamborn has the standing to help steer the ongoing budget and debt-ceiling debate away from the inflexible nature of sequestration.

There’s no way to minimize how much is at stake here for Colorado Springs. We cannot afford to be at the mercy of repeated negotiations in Congress, especially when such a large faction of the House (Republicans as well as Democrats) would be fine with even deeper military cuts.

Our position remains shaky, and the months ahead will be treacherous. But the nightmare didn’t happen this time.