Just two years ago I wrote about an impending fiscal cliff at the end of 2010. It's nearing the end of 2012 and the country is heading for the same fiscal cliff, only bigger.
Just two years ago I wrote about an impending fiscal cliff at the end of 2010. It’s nearing the end of 2012 and the country is heading for the same fiscal cliff, only bigger.
Will Washington actually come up with a solution or just move the cliff again?
The cliff, of course, involves a myriad of tax cuts set to expire and federal spending cuts about to go into effect unless Congress and the White House can work out an agreement by the end of the year.
Most of the tax cuts set to expire were enacted in 2001 and 2003 as part of the Bush administration tax cuts. When originally passed, provisions were set to expire at the end of 2010, which seemed so far in the future that creators believed Washington could work out an agreement by then.
Instead, a last-minute deal delayed the expiration, extending most of the main tax cuts for two years with a few provisions for only one year. In effect, Congress moved the cliff back a couple years rather than coming up with a long-term solution.
The tax-cut issue is referred to as sequestration. The across-the-board cuts were part of a deal in 2011 made in exchange for congressional approval of raising the federal debt ceiling. The end result is that if Congress does not come up with a solution by the end of the year, there will be an across-the-board cut of $1.2 trillion, including $500 billion in defense spending.
Although most conservatives agree that budget cuts are needed for the growing behemoth-sized federal government, the sequestration cuts are taking a butcher’s approach when a surgeon’s approach — targeted cuts — is needed.
Once again, with only weeks before the deadline, congressional leaders and the White House appear nowhere close to a solution. President Obama, along with most Democrats, support a proposal to extend most of the tax cuts on the middle class while allowing the tax cuts affecting the wealthiest Americans to expire.
The Republicans majority in the House seems unwilling to budge on any proposal that does not include extension of the all the tax cuts. Many of those House Republicans have signed a no tax pledge and are being reminded by pledge sponsor Grover Norquist that a vote for a deal that does not include extending all the tax cuts would be a violation of the pledge.
However, several Republicans are already signaling they are ready to tell Norquist to take a hike if necessary for the good of the country. Sen. Saxby Chambliss, R-Ga., said last week, “I care more about my country than I do about a 20-year-old pledge.”
In Arkansas, Democratic Congressman Mike Ross called for a bipartisan solution in a statement this week.
“Members of Congress must recognize that we have the opportunity and responsibility to come together as Americans, stop the partisan bickering and put forward a plan that gets our fiscal house back in order. Members of both parties should be willing to reach across the aisle, compromise and work together to find a bold, bipartisan and balanced approach to solving this nation’s long-term fiscal crisis and put us on a path to fiscal stability,” said Ross.
However, it is worth noting that Ross did not seek re-election this year in part because, in his words, “Washington is mired in gridlock, gamesmanship and constant partisan bickering.”
I suppose this is yet another opportunity for Washington to prove us cynics wrong and actually come up with a long-term solution. The prospects don’t look good, though. I imagine we will be looking at another fiscal cliff in the near future — an even bigger one.
Jason Tolbert is an accountant and conservative political blogger. His blog — The Tolbert Report — is linked at ArkansasNews.com. His e-mail is jason@TolbertReport.com.