Americans suffered a whole lot of anxiety in anticipation of congressional action to keep us from sliding off the much-feared fiscal cliff, only to see Congress take the utterly expected and truly unimaginative action of removing scheduled middle class tax increases, increasing tax rates on incomes over $400,000 and delaying spending cuts.
Politics is about compromise, and this was certainly that, but unless and until Congress gathers its collective courage to truly fix the national debt there will always be another fiscal cliff looming.
Today, among much pomp and formality, the 113th Congress — with 12 freshmen senators and 67 freshmen representatives — will be sworn into office. With the full support of citizens to do something to resolve the United States’ financial dilemma, we hope and beg this Congress will do what its predecessor did not: lay off the credit card and get our national checkbook under control.
On Wednesday, hours after Congress OK’d the fiscal cliff bill, Erskine Bowles and Al Simpson — whose “Fix the Debt” plan has been widely held as a responsible recommendation to reduce the federal deficit — released a statement criticizing the nearly-do-nothing bill.
“Washington missed this magic moment to do something big to reduce the deficit, reform our tax code and fix our entitlement programs,” even though it knew for more than a year that we could tumble over the cliff on Dec. 31, they said.
In fact, they suggested that Washington delayed and delayed action on purpose to force 11th-hour action, action that ultimately doesn't even stabilize debt.
The so-called and now-averted “fiscal cliff” was never so much a cliff as it was a vise. The term refers to the financial crunch we would have faced in the new year as tax hikes and spending cuts went into effect, cutting paychecks while simultaneously trimming government services and programs.
Even though the Senate passed the reform 89-8 on Monday and the House voted 257-167 late Tuesday, the fighting over taxes and spending is not over. In fact, it may have just begun.
While middle class tax increases have been neutralized, decisions on spending cuts were merely delayed another two months. And, as The Washington Post reports, there are plenty of corporate tax breaks preserved in the final bill, totaling some $77 billion, including $547 million to subsidize rum distilleries in Puerto Rico and the Virgin Islands. What makes the rum subsidy especially curious is that the non-voting Puerto Rican representative to Congress says continuing the subsidy that's been in place since 2009 is too generous, and yet Congress voted to keep it in place anyway. Arrr!
So, while we all saw pictures of Democratic Rep. Nancy Pelosi and Republican Speaker John Boehner patting their brethren on the back and claiming success, the cliff looms on and the real work of cutting the debt — by reducing spending — will be as unpleasant as ever. And, remember the debate over the debt ceiling? That isn’t finished yet either.
In fact, the arguments and emotions flavoring the debt ceiling and fiscal cliff debates will almost certainly collide next month since President Obama, on Tuesday, declared he had no intention of continuing debt ceiling talks with Congress or cooperating in any way with action to curtail his ability to borrow money. (We hit the $16.4 trillion debt ceiling on Dec. 31, maxing out the nation’s “credit card” until spending cuts are implemented or the ceiling is raised.)
For the past several years now, we’ve seen Congress posture and pose, but we’ve seen very little progress on debt management. Is there some point of pride in delaying the work?
And is there some disconnect with what constituents want and, frankly, need?
It appears so, having watched Congress take a “vacation” break last week to go home for the holidays — something not permitted our troops or many other working Americans — and then missing the Dec. 31 deadline to pull us back from the fiscal cliff. Passage of the bill was only a day late, but when we’re talking about the financial health of this country, that’s really not OK.
We wish the incoming Congress well, hope it has a greater work ethic than the outgoing Congress, and that at some point it dawns on this august body that it has the fate of our economy, our livelihoods and our families in its hands.
Forget the rum subsidy and stabilize our debt.
The opinions expressed in this column reflect the views of the ownership and the editorial board.