At the end of this year, 700 billion dollars worth of tax increases and major spending cuts will strike the American economy, thanks to the “fiscal cliff” created by the sequester that failed to force a compromise. Such sharp austerity measures could drive the United States back into recession and make unemployment even worse than it is now. Congress needs to fix this, and they need to do it now.
The mechanism that created the fiscal cliff is called the “sequester.” The sequester was created by the Budget Control Act, passed in August 2011. At the time, Congress was unable to come to any compromise that would actually solve the problems of habitual deficit spending and fiscal irresponsibility that plagues our nation, so they procrastinated having to deal with it for another year and passed a short-term deal to raise the debt ceiling. Now 2012 is nearly gone, and the fiscal cliff is almost upon us.
Unfortunately, we seem no closer now to a solution than last summer. Instead we hear President Obama proclaiming Republicansare going to ruin Christmas if they don’t immediately accept his tax plan; the Senateis arguing about filibuster rule changes instead of trying to make a deal; and many House Republicans remain adamantly opposed to any increase in tax rates for anyone and unwilling to compromise. In short, Congress and President Obama are playing “budget chicken” and it is the American people that will pay the price of their irresponsibility.
None of this should come as any surprise. The Senate hasn’t passed a budget in three years. Instead, every few months Congress passes another short-term spending bill to keep the government operating without resolving the fundamental fiscal problems facing our country.
Enough is enough. Congress and the President need to step up and make a compromise that resolves the fiscal cliff, and not just a short-term deal that delays the consequences for a few months. Raising taxes and substantial spending cuts will both have to be part of fixing our budget crisis. Neither party will be able to have everything they want; what we need is a deal that both parties can live with and that can remove the crippling uncertainty the fiscal cliff has created in the US economy.