The year is quickly coming to an end, and if you believe the hype, lawmakers appear to be nowhere close to making any breakthroughs and solving the fiscal crisis, in order to keep us from going over the so-called “fiscal cliff.”
After President Obama won re-election, this was the biggest domestic policy issue he faced. Now House Speaker John Boehner has said that the discussions on how to resolve the crisis have reached a stalemate.
Here’s what a Congressional stalemate would mean for our fiscal future. This country faces a combination of scheduled tax increases and spending cuts come Jan. 1. The Bush tax cuts would finally expire for millions of Americans and small businesses, and because Congress couldn’t reach a deal last year on reducing the deficit, billions of dollars in spending cuts would take effect.
If Congress reaches no agreement to extend the tax cuts and curb the spending cuts, the economy could once again tumble into recession.
Time is running out. If Republicans and Democrats don’t come to a comprehensive agreement and create a path to redevelopment, Americans will be the ones falling off the cliff.
Obama has pledged that his proposal to freeze tax rates for most Americans and only increase the rates on the wealthy, while allowing certain tax cuts designed to benefit the wealthy to expire, would be enough to counteract the fiscal cliff. Republicans believe that capping deductions would be enough to raise tax revenue; Obama disagrees.
I think if we’re supposedly on the edge of a fiscal cliff, we need balance to survive. It’s not just about taxing the rich. There must also be cuts. I urge Congress not to fall for the tax-now, cut-later scheme. The two must go hand in hand.
For example, once again, Obama forgot to include spending cuts on entitlement programs such as Medicare, Medicaid, Social Security and the now infamous Obamacare in the plan he proposed to Republicans. Republicans are calling for concessions in the federal entitlement programs.