‘Fiscal Cliff’ Averted — Now What?
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CBS NEWS - Congress didn’t completely fall off the “fiscal cliff,” but they’re still hanging onto the edge.
By waiting until the last minute to scrape together a limited bill (which extends the Bush-era tax rates for most Americans and extends long-term unemployment insurance, among other things), Congress sidelined some major fiscal issues they initially sought to resolve before the new year.
Leaders in Washington deferred for two months the $1.2 trillion in across-the-board spending cuts (known as “sequestration”) set to hit the Pentagon and domestic programs this week. Additionally, the bill passed this week failed to raise the debt ceiling, even though the Treasury technically hit the $16.4 trillion limit Monday. Both of these issues will come to a head just as Congress is expected to vote on a new federal budget. The convergence of these issues practically guarantees that within a matter of weeks, Washington will once again find itself embroiled in another fiscal crisis.
Lawmakers on both sides of the aisle in recent days have decried the state of uncertainty that’s lingered over Washington for months: “We all know uncertainty is the enemy of prosperity,” Rep. David Dreier, R-Calif., said on the House floor Tuesday evening. Congress this week did manage to erase fears that the middle class would face an income tax increase. Still, the next “fiscal cliff” not only keeps the threat of a government shutdown on the horizon, but it is also sure to revive seemingly intractable fights over government spending and programs like Social Security and Medicare.
In remarks Tuesday night, President Obama said Washington should strive to address these remaining fiscal issues “with a little bit less drama, a little less brinksmanship, [so as to] not scare the heck out of folks quite as much.”
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