While politicians in Washington treat “compromise” as if it were some terrible affliction or sign of weakness, rather than the idea that has made our republic work for more than two centuries, we want to mention some items of interest related to the rapidly approaching fiscal cliff.
✔ Starbucks on Thursday began having its barristas write the words “Come Together” on each cup of coffee sold in its Washington, D.C., stores. It’s a message to politicians to push harder for an agreement to avoid the fiscal cliff.
Like every other business in the United States, Starbucks is not sure right now what its corporate tax rate will be come the first of the year, and what tax rates will be for its employees. More importantly, there is general uncertainty about the effect that going over the cliff will have on the economy.
✔ If Congress does nothing, nearly all Americans will start paying higher taxes next week. Income tax rates will go up, along with taxes for Social Security and Medicare.
✔ On Jan. 2, $110 billion in spending cuts, equally split between domestic and military programs, will begin taking effect. That will mean pay cuts, furloughs or layoffs for tens of thousands of federal employees.
✔ If Congress takes no action to avoid the cliff, the struggling economy is likely to slide back into recession in 2013, the Congressional Budget Office has said.
✔ Faced with paying higher taxes and the prospect of another recession, it’s little wonder Americans are worried. Consumer confidence fell sharply in December, for the second straight month, according to the Conference Board index. And investors spooked by congressional inaction related to the fiscal cliff have been selling this week, sending all major stock indexes tumbling.
✔ Congressional inaction remained the order of the day Thursday. Senate Majority Leader Harry Reid announced there was little chance of approving legislation to avoid the cliff — even if a compromise could be reached — prior to the Jan. 1 deadline. This after House Speaker John Boehner punted when he couldn’t get enough Republican votes for his very poor compromise plan last week. Earlier this week, Boehner said it’s now up to the Senate to do something, but neither the Senate nor the House has offered a realistic compromise.
✔ President Barack Obama, who did make major concessions on tax hikes and entitlement reform last week before Boehner halted negotiations, this week cut short his Hawaii vacation in an attempt to spur action to avoid the cliff. He called the leaders of both parties in the House and Senate, urging action, but so far to no avail.
✔ Centrist politicians of both parties who really want to avoid the cliff are lying low rather than challenging their party leaders or fringes.
We urge Congress to act quickly to avoid the fiscal cliff. Sitting down with your adversaries to find middle ground is more difficult than posturing and pointing fingers. But members of Congress are elected to do the former.