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Accountability-central.com AC Alert for December 04, 2012 Nearing The Fiscal Cliff--Will Anyone Blink?
So here we are, one month before the start of a new calendar year, the convening of the 113th Congress, the second term inauguration of President Barack Obama -- and a month away from possibly careening over the dreaded "fiscal cliff" that everyone says our country must avoid going over.
As our editors penned this alert, political leaders from both sides of the aisle are doing what they do best (and worst): accusing their opponents of misleading the public and seeming not to be able to negotiate in good faith -- keeping the country's interest in mind, not their individual ideological or political positions being more important than the economic well-being of the United States of America.
Ultimately, someone in national leadership is going to have to "blink" or our country might indeed run out and over that fiscal cliff.
Despite what our elected officials may be saying in public, however, there is subtle agreement under the radar screen among the major political parties that they must avoid the US$1.2 trillion in automatic spending cuts scheduled to begin on January 2nd. That, some experts say, would tip the recovering U.S. economy back into recession.
The draconian spending reductions were adopted as part of the Budget Control Act of 2011 and are set to automatically take effect in 2013 -- if an alternative agreement is not reached. The reductions to take place over a ten-year period were designed to be distasteful to both major political parties:
Consider this: "The Office of Management and Budget (OMB) released calculations in September showing there would be a 9.4% cut to discretionary defense spending, such as overseas operations and weapon systems. Non-defense discretionary spending, which includes housing assistance and energy subsidies for low-income people, would drop by 8.2%.
"And non-defense mandatory spending, including the U.S. Forest Service and social services block grants, would be cut 7.6%. Certain low-income programs, such as Medicaid and food stamps, are shielded. If these cuts are enacted, it would hurt the economy, experts say.
"In fiscal 2013 alone, federal spending would fall an estimated US$65 billion, according to the Congressional Budget Office. This could shave off two-thirds of the expected economic growth for the year and boost the unemployment rate by as much as 1.5 percentage points, according to Steve Fuller, director of the Center for Regional Analysis at George Mason University." (Source for complete story: CNN Money)
AC editors have been tracking the 'fiscal cliff' issue all year, and especially as the volume of noise increased after the presidential election. What will December bring? Who is really to blame? And what does it all mean for the average citizen? There's so much at stake we feel it deserves a content section of its own.
So, beginning this week, we've added a new Hot Topic: "Fiscal Cliff Notes." It's a bit of wordplay on the old, familiar "Cliff Notes" that we needed to survive in our college days, but the subject matter here is dead serious.
Here's a sample of the type of news and commentary you'll be seeing every day in our new Hot Topic Section: Fiscal Cliff Notes:
White House Offers New Fiscal Plan, Prodding G.O.P.
(Source: NY Times) House Republicans said on Thursday that Treasury Secretary Timothy F. Geithner presented House Speaker John A. Boehner with a detailed proposal to avert the year-end fiscal crisis with US$1.6 trillion in tax increases... The proposal, loaded with Democratic priorities and short on detailed spending cuts, met strong Republican resistance.
Mortgage-interest deduction could be on the table in 'fiscal cliff' debate
(Source: The Washington Post) As Congress and the White House negotiate the first major rewrite of tax laws in decades, changing the generations-old mortgage-interest deduction, which costs the government roughly US$100 billion a year, has gone from far-off possibility to part of the conversation.
Goldman's Blankfein: 'Country can't afford all this'
(Source: CNN Money) Goldman Sachs CEO Lloyd Blankfein said last week that a compromise in Washington was essential to avoid the fiscal cliff. Blankfein said there has to be a compromise and people are going to have to yield.
Buffett Mocks Norquist Idea on Taxes Thwarting Investment
(Source: Bloomberg) Warren Buffet, the second-richest man in the US, pressed his call for more taxes on the wealthy by mocking the idea that higher rates discourage investment.
Obama to appeal to public on fiscal cliff
(Source: AP) President Barack Obama made a public plea last week for his strategy in dealing with the looming fiscal cliff, traveling to the Philadelphia suburbs even as he pressures Republicans to allow tax increases on the wealthy while extending tax cuts for families earning $250,000 or less.
White House issues new warning on 'fiscal cliff'
(Source: Los Angeles Times) On the heels of record sales over the Black Friday weekend, the White House warned that automatic federal tax increases set for next year could hurt the rest of the holiday shopping season and would likely crimp consumer spending by about US$200 billion in 2013.
The fiscal cliff" isn't a cliff at all
(Source: CBS News) If no deal comes, the nation won't actually be going over a metaphorical cliff say CBS analysts Brian Montopoli and Alain Sherter. They claim the so-called "fiscal cliff," in fact, is more accurately described as a "gradual fiscal slope."
This is just a sampling of the information in our Accountability-Central.com Alert. Go here for the full text of this alert, and more information on Sustainability, and other Accountability related topics