The so-called “fiscal cliff” is coming, looming just ahead, and if we aren’t careful, the entire country may fall off of it. What is the fiscal cliff, you may be asking?
The fiscal cliff has been described thusly:
Historically low tax rates first enacted under Republican former President George W. Bush in 2001 and 2003 are set to expire at the end of the year if Congress fails to act, as are jobless benefits for the long-term unemployed and a temporary payroll tax cut.
In addition, $1.2 trillion in across-the-board reductions in spending on federal programs would begin to phase in as a result of Congress' failure late last year to find a comprehensive deal to cut the budget deficit.
The United States also is expected to hit the $16.4 trillion statutory limit on its debt sometime between the Nov. 6 U.S. election and the end of the year. If Congress fails to raise it, it would lead to a U.S. default.
It is less than clear how, under this highly partisan environment, the parties can compromise enough to get the needed votes to prevent this from happening. Many of the more fervent Tea Party types seemingly want the U.S. to default on its debts, in the name of fiscal responsibility.
Three quarters of tea party supporters said that they were more concerned that raising the debt ceiling would “lead to higher government spending and make the national debt bigger,” while just 19 percent said they were more worried that “not raising the debt limit would force the government into default and hurt the nation’s economy.”
That stands in stark contrast to all Americans in the poll, 47 percent of whom said raising the debt limit was a bigger concern while 42 percent said not raising it was the bigger worry….
That’s a major potential political problem for Boehner, since he has made clear in a series of remarks over the past few days that one thing he and President Obama agree on is the need to raise the debt ceiling by early next month.
If a significant chunk of his House members don’t fear the consequences of a default, it’s very difficult for Boehner to make the case for the fierce urgency of now in the debt debate.
This time around, unless an agreement is reached, automatic spending cuts are supposed to go into effect. There are supposed to be deep cuts in the defense budget (thought to hurt Republicans) and discretionary spending and Medicaid (thought to hurt Democrats). Whether any either party has the wherewithal to either go through with an actual default, face the drastic spending cuts, or actually compromise remains to be seen. Posturing, not statesmanship seems to the name of the day.