Everyone in America is tired of listening to discussion of the fiscal cliff
Everyone in America is tired of listening to discussion of the fiscal cliff.
Thanks to an inability of Congress to enact basic legislation, we are headed over the cliff. Right now, both sides are dueling without guns. Neither chamber of Congress has put together a bill that would stave off the automatic tax increases and expense cuts that were set to go into effect if provisions in the last stop-gap measure – the Budget Control Act of 2011 - weren't made permanent by Jan. 1, 2013.
Going over the fiscal cliff means the end of a two percent payroll tax break for every employed person in America. It means the end of the Bush tax cuts which included several tax credits on the IRS Forms you will be filling out in a month or so and also a lower standard deduction for all tax filers.
There are also spending cuts that would go into place that would be as close to austerity measures as the United States has come in decades.
The actions that go into effect without an agreement by December 31 are expected to cut about $500 billion from the nation's budget deficit.
That's where we are.
Even with tax hikes and spending cuts that most people see as going to far, we don't even eliminate half of our deficit.
I am not sure that the measures would even work. If you cut the deficit in theory, but send the nation into the second dip of a double-dip recession, then the additional loss in revenue would possibly consume all of the savings you are expecting.
If Congress could agree on targeted spending cuts and intelligent tax increases, we could dodge this bullet and let an expanding economy help cut the deficit by raising revenue organically. Taking the same percentage of a larger pie makes far more sense than taking more of the same pie. If we learned nothing else from our holiday dinners, it is that you have to have enough pie to go around.
If fear mongering helps then we should be in great shape.
The fiscal cliff raises your taxes, cuts important services and will raise gas and milk prices to levels that would make using either almost untenable.
Other than that, 2013 should be a great year.
I don't expect a deal to get done by the deadline.
Both sides are willing to let the cuts expire in order to see where the leverage falls.
That's a dangerous game. For the Democrats, they could lose any political capital they gained with the election of Barack Obama for a second term and keeping their control in the Senate.
The Republicans have more to lose because the damage that would be inflicted on people hits demographics hardest where they already struggle to win votes. The 2014 midterm elections should be a chance for them to have similar success to that which they enjoyed in 2010. But the TEA Party representatives from the right wing of the party are already getting blamed for more than their share of the problems causing this issue.
If blame for going over the fiscal cliff lands on them, 2014 could be a significant setback for the GOP.
Until then, both houses of Congress wait for the other to act. No one wants to be the first one to bet in this game. Everyone wants to be the guy with his hat pulled low bluffing on every hand.
The rest of the country feels like the little character on the Price is Right game Cliffhangers. We keep inching up the fiscal cliff and appear to be headed over. Please stop… Please stop… Please…. Doh! It's too late. We don't win the car.
Both sides know that when these measures take effect that they can enact legislation to retroactively "save the day."
What both parties need to remember is that when action is required, no one wins in a staring contest.
Kent Bush is the publisher of The Augusta Gazette, The El Dorado Times, and The Andover American newspapers. He can be reached at:email@example.com.