Stumbling toward the fiscal cliff
A report from the Congressional Budget Office Wednesday reinforced the fact that should be obvious to every sentient observer, even those in Washington, D.C., wearing political blinders: We are headed rapidly toward a fiscal catastrophe.
Unless Congress acts before Jan. 1, the CBO said, the combination of $500 billion in tax hikes and spending cuts will plunge the nation into another recession and boost the national unemployment rate back over 9 percent.
We’re pleased to see that a biparisan majority of Colorado’s congressional delegation — including Sens. Michael Bennet and Mark Udall and 3rd District Rep. Scott Tipton — recognize the problem.
Earlier this month, seven members of Colorado’s nine-member congressional delegation sent a letter to both parties’ leaders in the House and Senate. In it, they urged congressional leaders “to work together to allow consideration of a bipartisan deficit reduction plan ... before the end of the year” to avert an economic crisis.
Of course, it’s one thing to say, “We want a bipartisan plan.” It’s a bit like declaring, “We support peace, prosperity and puppies.” It’s far more difficult to agree on the details of a bipartisan plan, even something like the carefully developed Simpson-Bowles plan that’s now nearly two years old and has yet to gain any traction in Congress or with the White House.
But at least Udall, Bennet, Tipton and others from Colorado say they want to see some sort of bipartisan plan. On the national level, congressional leaders and presidential candidates are just firing broadsides at each other.
Republicans in Congress and Mitt Romney want the Bush tax cuts temporarily extended until meaningful tax reform can be enacted. The Bush cuts are set to expire Jan. 1 if no action is taken.
No way, say Democratic leaders and President Barack Obama. They want tax cuts extended only for couples making less than $250,000 a year. They want wealthy Americans to pay more, regardless of the consequences to the economy.
Actually, what’s needed is a combination of long-term spending cuts and broad tax reform that eliminates most tax loopholes, as the Simpson-Bowles plan outlined.
Unless that can be accomplished in the lame-duck session following the Nov. 6 election — a long shot, at best — Congress needs to come up with a temporary plan.
It would be a mistake, while our national economy is so fragile, for the federal government to simultaneously raise taxes and also significantly cut federal spending on both domestic and military programs.
That’s the fiscal cliff the CBO is talking about. Politicians of both parties are playing a dangerous game of chicken on the issue, and they are causing this nation to stumble toward that cliff.