Fiscal Cliff Diving

You’re too close to the edge! Oh no!

It’s official. Americans have now leaped over the fiscal cliff and our financial well-being rests in the hands of our elected leaders.

That prospect alone scares the hell out of me.

The good news is that the most recent deal between Democrats and Republicans passed in the Senate by a bipartisan vote of 89-8. Neither side got exactly what it wanted, but both sides got something.

This new deal means that individuals earning more than $400,000 per year will face tax increases while everyone below that threshold will remain the same. Other features include an extension of unemployment insurance for one year, an increase on inherited estate taxes and renewed tax credits for tuition, child care and research and development, to name a few.

It’s about time these people learned the word compromise, don’t you think?

Of course, there is also plenty of bad news. The deal now has to pass in the GOP-controlled House. And despite strong bipartisan support in the Senate, the sailing won’t be nearly as smooth in the House.

“The purpose of this meeting is to review what the Senate has passed, discuss potential options, and seek member feedback,” a GOP leadership aide said recently. “No decision on the path forward is expected before another member meeting that will be held later.”

The catch is that for this deal to pass, it must do so before Thursday at noon when a new Congress will be sworn in. If things aren’t finalized before the deadline, then both chambers would have to start all over again.

Tax

No more, please (Photo credit: 401(K) 2012)

This may appeal to politicians, who seem to enjoy dragging things out indefinitely and wasting everyone’s time and money, but the American people will not be happy if this occurs. And I have no apprehension in speaking on their behalf, either.

Even more bad news is that even if this deal passes and is signed into law, there are a number of key issues that still won’t be resolved for months. The so-called “debt ceiling” isn’t even mentioned in the package. And the sequester, automatic cuts in federal spending that should have taken effect tomorrow, will be delayed for two months.

In other words, Congress will have even more work to do later and people on opposite sides of the aisle will again be expected to find some kind of common ground.

So that’s where we stand at the moment, my fellow Americans: diving off the fiscal cliff while our leaders scramble to construct a safety net below us. Let’s hope that their combination of compromise and procrastination works or 2013 could be a really rough year.

Posted on January 1, 2013, in Perspectives and tagged , , , , , , , , , , , . Bookmark the permalink. 4 Comments.

  1. I’d be truly surprised if they passed it. The Republicans are notorious for this type of grand standing they’re supporting it now knowing that they can reset the entire process and attempt to place the blame on the Democrats or at the least under mounting pressure to get the bill passed push through changes that will gut significant portions of the bill taxing the rich.

  2. While it passed, nearly NOTHING was done to cut spending. Period.

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