The federal budget "fiscal cliff" -- automatic deep budget cuts and tax increases -- holds a special threat for California.

Unless Congress and the president strike a deal to avert it, the state's first projected budget surpluses in a decade could vanish into an $11 billion deficit triggered by a national recession, the state's nonpartisan Legislative Analyst's Office said in its annual fiscal outlook.

Like states around the country, California would be forced to contend with across-the-board federal tax rate hikes and massive spending cuts, dampening the state's economic rebound.

Among the results:

  • The Bush tax cuts would expire, leading to increased tax rates for the vast majority of taxpayers.

  • A temporary 2 percentage-point reduction in Social Security payroll taxes would expire.

  • In high tax states such as California and New York, more people would be stuck with the federal alternative minimum tax because Congress has not approved an AMT "patch."

  • High income taxpayers would be hit by an additional 0.9 percent rate hike for earnings and a 3.8 percent investment surtax on capital gains and interest income, which are included in federal health reform.

  • Several expanded tax credits for low-income households would expire.

  • Certain tax breaks would expire, such as the adoption credit, the deduction for education expenses and the research and experimentation business tax credit.

  • Pre-2000 federal estate tax rates would resume, reeling in 10 times the number of current taxpayers.

  • Domestic and defense-related spending cuts would hit California hard.

  • The extension of emergency unemployment insurance benefits would expire at the end of the year.