There is a rather stark and scary report in Politico today about the fiscal cliff America is about to go over.
Remember, the bipartisan super committee of a few select members of Congress, including Washington Senator Patty Murray (D), failed to reach an agreement on a plan to avoid triggering automatic spending cuts and there is no apparent effort to stop the tax reductions put in place by President George W. Bush from expiring.
So now, the day of reckoning is coming and how Barack Obama and Mitt Romney intend to remedy the situation needs airing on the campaign trail. Those in Congress need to address the issue as well regardless of how difficult that might be.
A trip over the fiscal cliff would likely send the U.S. economy into a recession in 2013, the Congressional Budget Office said on Wednesday, underscoring the impact that congressional gridlock will have if a deal to prevent scheduled tax hikes and spending cuts cannot be struck by the end of the year.
If Congress and the White House fail to reach a deal to prevent the tax increases and across-the-board spending cuts that comprise the fiscal cliff, average unemployment would top 9 percent in 2013 and the economy would shrink at an average rate of 0.5 percent over the year, according to CBO’s updated budget and economic projections.
Even if Congress does act to prevent the fiscal cliff, the latest CBO report does not envision a thriving economy. Preventing these policies from being implemented would lead to a deficit of $1 trillion in fiscal 2013. The federal government is set to run a $1.1 trillion deficit in 2012, CBO projects. This would be the fourth straight year of deficits of more than $1 trillion.
Our national's fiscal crisis is real and it will take time put our house in order. It really is the lesser of two desperate situations which both Democrats and Republicans need to address now.
Don C. Brunell, President (DonB@awb.org)