No Fiscal Cliff deal would hurt RI

PROVIDENCE, R.I. (WPRI) -- Rhode Island could be hit hard if Democrats and Republicans can't get a deal done to avoid the country falling off the so-called Fiscal Cliff.

One local economist tells Eyewitness News the state is on pace to see economic gains in the new year. Median home prices in Rhode Island are going up, and experts are predicting an increase in construction, as well as growth in the financial services and hospitality industries. However, without a deal, that will all change.

"This is going to create real problems in Rhode Island has a significant defense industry and there are going to be immediate cuts in employment," Dr. Ed Mazze, a business professor at URI told Eyewitness News.

The average Rhode Islander could also see their taxes go up $2,000.

"Tax cuts that disappeared in the past will come back as new taxes, and that of course, will affect spending," Mazze explained.

Despite the apparent gridlock on Capitol Hill, Mazze says he thinks congressional leaders will manage to hammer out a compromise in the coming weeks.

"I am confident we'll be able to resolve some of it, but it we'll definitely go in tot he early part of 2013," he said.