Fiscal Cliff Frustration Isn’t Just About the Money
December 27, 2012
With the fiscal cliff deadline looming, there is no escaping the monetary implications, including massive tax increases and over-due spending cuts. The fiscal cliff is also a symptom of a tremendous breakdown in political leadership in Washington, D.C. Americans are frustrated, and rightfully so, with not only the fiscal consequences of our current condition but also that Congress and the President have seemingly waited until the very last minute to do their jobs. Unlike Super storm Sandy and the snow/ice storms that swept across the country recently, the Fiscal Cliff is man made and Congress and the President willingly put the country in this predicament.
Some amount of dysfunction has always been present in our nation’s capital, but the last two years has seen an unprecedented amount of finger pointing and 11th hour legislating that seems to always leave taxpayers as the losers.
In the spring of 2011, a government shutdown was narrowly averted when Congress and the President decided on a budget that produced miniscule spending cuts. The rhetoric peaked when there were threats of the annual Cherry Blossom parade being cancelled due to a potential government shut down.
The year didn’t get any better. In the summer of 2011 the country went through the now-infamous debt ceiling debate. Americans were warned that if an agreement to raise the debt ceiling wasn’t achieved, the country’s credit rating would be harmed. So, in just the nick of time, Congress and the President agreed on a deal that included a preliminary round of spending cuts and the creation of the Super Committee to come up with $1.2 trillion in additional reductions. Despite these last minute “heroics,” the U.S.’s credit rating was downgraded.
The first round of spending cuts were nothing more than window dressing. Chris Edwards of the Cato Institute warned of fake spending cuts in the deal to raise the debt ceiling in an August 1, 2011 blog posting, “The ‘cuts’ in the deal are only cuts from the CBO ‘baseline,’ which is a Washington construct of ever-rising spending. And even these ‘cuts’ from the baseline include $156 billion of interest savings, which are imaginary because the underlying cuts are imaginary. No program or agency terminations are identified in the deal. None of the vast armada of federal subsidies are targeted for elimination.”
As part of the August 2, 2011 deal to raise the debt ceiling, the Joint Committee on Deficit Reduction (aka the “Super Committee”) was created to come up with an additional $1.2 trillion in deficit reduction. Right before Thanksgiving of 2011, the Super Committee declared failure and disbanded, leaving the country preparing for the coming fiscal cliff in January 2013.
Right before Christmas, Congress passed an Omnibus-spending bill that ended up containing billions in earmarks. Although the list of earmarks wasn’t even released until after the bill was passed and signed by the President.
This past year was an election year so nobody in Washington, D.C. dared to do anything controversial. Congress and the President ran out the clock as they took a six week summer break. Congress returned in September just in time to pass a continuing resolution to keep the government funded through the end of 2012 and into 2013.
In early October, Congress went home for another six weeks and tried to convince their constituents that they deserved another two years (House) or six years (Senate) in office. And, there was a presidential election in which both sides jockeyed to convince the American public that they knew best on how to “fix’ Washington. It is shocking to see a group of people, Congress and the President, to run for reelection after running up trillions of dollars in deficits and debt.
So, here we are, mid-December: the threat of the fiscal cliff looming over the country and many Americans entering the holiday season plagued by economic uncertainty. Both parties are once again pointing fingers and blaming the “other side.”
Recent elections have shown that Americans are becoming less partisan and more results driven. House Republicans lost their majority in 2006 because of their excesses. Democrats lost control of their majority of the House in 2010 for the same reason. Taxpayers want results and a Congress that performs their most basic functions and doesn’t wait until the very last second to solve the problems that they created.
The clock ticks closer and closer to the fiscal cliff and taxpayers are worried about massive tax increases and economic uncertainty. Yet, most of Congress is still at home enjoying their holidays. Taxpayers and the country deserve better.