If you’re like most Americans, you’re inundated with the obligations of day-to-day life. You have probably heard only in passing, the dire warning on your local TV newscast, "Washington gets closer to going over Fiscal Cliff." Sadly, such government paralysis has become routine, Washington is so polarized that less than a month after the Presidential Election, it seems elected officials are in the same situation of getting nothing done.
Have you noticed yet that just about every political decision from Washington these days comes down to the very end, scaring the American People about repercussions? Will unemployment benefits run out for those barely surviving? Are cuts to Medicare looming for seniors? Will you soon lose the Mortgage Interest deduction on your taxes?
Such stalemate action and scare tactics coming out of Washington is unfair to constituents from coast to coast.
The People deserve better.
If it weren’t so ironic it would simply be sad that the country is even in this position of going "off the Fiscal Cliff." It all comes back to inaction on the last decision.
Washington lawmakers couldn't agree on the fiscal debt-ceiling battle in the summer of 2011, and ultimately Congress raised the national debt limit to over $16 trillion. A so-called Gang of Six (bipartisan group of senators) was formed in 2011 as a dedication to working on proposals to restore the nation’s fiscal health; they came up with the fiscal cliff idea as a dramatic way of forcing action.
The latest round of high-stakes gamesmanship focuses on whether to extend the temporary tax cuts that originated under former President George W. Bush. These tax cuts, which will expire on December 31st , would remain intact for all taxpayers under the Republican plan, the Democrats and President Obama, however would only allow the tax cuts to remain for those whose incomes fall under $250,000. And with barely a month left before the "fiscal cliff," Republicans and Democrats remain strongly divided.
Recently, some House Republicans, have expressed flexibility beyond that of their party leaders on considering an increase in tax rates for the wealthy, however, that is only as long as they are accompanied by significant spending cuts.
The term "fiscal cliff" is Washington shorthand for a series of automatic spending cuts and tax increases set to take effect in January. If enacted, they would amount to the largest burst of deficit reduction in more than 40 years but could also push the country back into a recession. The cuts include about $100 billion in automatic cuts to defense and domestic government spending. The plan also includes about $400 billion in tax hikes, caused primarily by the expiration of a temporary payroll tax cut and other income tax breaks adopted during the George W. Bush administration. In addition, more than 26 million households will, for the first time, face the alternative minimum tax, which threatens to tack an average of $3,700, onto taxpayers’ bills for the current tax year.
Leaders from both parties say they are determined to avert the fiscal cliff. But some Democrats and policy analysts have suggested it might be better to actually go over the cliff. Once the tax hikes have kicked in, these "cliff divers" argue, Republicans would be hard-pressed to roll them back and would have to accept a deal on taming the deficit that contains more new tax revenue than GOP lawmakers currently want.