As our nation faced a “fiscal cliff” at the start of the new year, we were grabbed by the heels at nearly the last minute, a temporary rescue that solves some problems but once again puts off the tough decisions.
If the fiscal cliff leap had been allowed to happen, tax rates for all Americans would have gone up and budget cuts, including huge ones to the military and unemployment aid, would have commenced.
The real damage, however, might have come in the financial markets, which had dropped precipitously in the week prior to the pending cliff leap. Markets might have collapsed had federal budget negotiations failed to produce an agreement to offset “sequestration” and the budget cuts designated to go with it.
The Senate, usually a more-congenial and less-partisan body than the House of Representatives, reached a largely bipartisan agreement late Monday night, barely meeting the designated year-end deadline to avoid the fiscal precipice. The House, with two sides that could charitably be described as “warring,” did not actually pass the budget measure until late New Year’s Day evening.
All of this brinksmanship could have been avoided without posturing from both sides, without provocative statements from President Obama in the waning hours, possibly even with the summoning of Vice President Joe Biden to the negotiations even earlier in the process. Biden, a Capitol Hill mainstay and renowned negotiator, helped forge a deal as the clock ticked away.
The deal reached raises taxes only on families making more than $450,000 a year and individuals making more than $400,000 annually but puts off tough decisions such as spending cuts to Medicare and Social Security programs, as well as to the military.
Still, in a way we are encouraged. Something actually got done in Washington, although some, including William Gale, co-director of the nonpartisan Tax Policy Center and a former Republican White House adviser, say it would have done the budget more good to have gone off the cliff and called the agreement “a huge missed opportunity.”
In the words of The Associated Press, “… Congress and the White House did what they almost always do. At the last minute they downsized their proposals, protecting nearly every sector of society from serious pain.”
As a result, tax rates didn’t go up for 98 percent of the populace and unemployment benefits weren’t slashed — for now. But the deal that will generate $600 billion in new revenue over 10 years is a far cry from reining in the spending that got us here in the first place. With one crisis averted, Americans in general would do well to tighten their own budgets as we await what’s next.
THE ISSUE:
Fiscal cliff battle
WE SAY:
We’re encouraged, but skeptical.
WHAT DO YOU SAY?
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