Buried within the mass of tax and spending provisions known as the fiscal cliff is a problem that could cause grief for taxpayers and the Internal Revenue Service.
A new poll finds the public’s fears over the looming “fiscal cliff” growing, as the year-end deadline for a deficit deal nears.
The federal budget deficit was $292 billion for the first two months of fiscal year 2013, $57 billion more than the shortfall recorded in October and November of last year, CBO estimates in its latest Monthly Budget Review. Revenues rose by $30 billion, or 10 percent, but outlays increased by $87 billion, or 16 percent.
Strengthening of America—Our Children’s Future, a bipartisan initiative cochaired by former senators Sam Nunn, Pete Domenici, Evan Bayh, and the late Warren Rudman to raise public consciousness of the country’s growing debt, has released a new report: “Achieving a Sustainable Fiscal Path: A Bipartisan Effort to Address the Nation’s Rising Debt.”
While avoiding the “fiscal cliff” is essential to near-term recovery and job growth, it is just the first step to restoring sustained prosperity in America. It would be catastrophic if negotiations between the president and Congress succeeded in avoiding the cliff but failed to address the fundamental threat of projected debt rising faster than the economy can grow.
This is what the other side of the “fiscal cliff” looks like.
If President Obama and Congress fail to reach a deal to avoid hundreds of billions of dollars of tax hikes and federal spending cuts, many Americans will feel the pain with less money in their paychecks in the first week of the New Year.
After two years of near-weekly meetings, countless conference calls, breakfasts, and dinners spent batting back and forth deficit-reduction ideas, the bipartisan “Gang of Eight” senators is shifting its focus, now that the deadline for a fiscal-cliff deal is just days away.
The question of how to replace the sequester — the $109 billion in automatic, across-the-board spending reductions set to start cutting into the budget at the start of the year — is emerging as a sharp point of conflict standing in the way of a fiscal cliff deal.
Time is running short — and so are the options available to avert the fiscal cliff. President Barack Obama and House Speaker John Boehner (R-Ohio) have just 21 days to resolve their differences over how to handle more than $500 billion in expiring tax rates and steep spending cuts.
Presumably, Congress will soon find a permanent solution to the austerity that will keep the economy growing (or perhaps even speed it up a bit) next year while addressing the longer-term debt problem. That will be the end of this sorry period in American politics, in which Congress continuously set up ever-more draconian consequences to incent its future self to make the hard decisions its current self kept putting off.
The White House and House Republicans need to stop posturing and lock themselves behind closed doors to hammer out a fiscal deal now, two budget experts said Monday.