09.21.2014  |   | Subscribe  | Contact us

All News & Blogs

E-mail Alerts

Fiscal save
A last-minute deal averts fiscal calamity

Date published: 1/3/2013

IF YOUR ARMS are tired, it may be because we were all windmilling like cartoon characters as the country went over the fiscal cliff on Tuesday. We caught a break as Congress reached a deal. Or did we?

The compromise package, which passed the House over strong Republican objections, averted panic in the financial markets as they opened on Wednesday after the New Year's Day holiday. It fended off the expiration of the Bush tax cuts for most Americans--only individuals making more than $400,000 and couples making more than $450,000 per year will see their taxes rise to the top 39.6 percent rate. But it did nothing about federal spending or the debt limit, ensuring another fight in two months. And it included some pork (including a $248 million tax break for Hollywood producers) that only a politician could love.

Reluctant House Republicans were taking flak from all sides as the compromise, which had passed the Senate on an 89-8 vote, sputtered. They were caught between a rock and hard place: A vote against the bill would lay the responsibility for higher taxes for all Americans directly at their feet. A vote for it would be distasteful on the grounds that it did not address ongoing fiscal concerns.

Both local congressmen, Rep. Rob Wittman, R-1st, and Rep. Eric Cantor, R-7th, cast "nay" votes. Calling it "the epitome of what is wrong with Washington," Mr. Wittman wrote that he opposed the measure "because it unfortunately does what Congress does best--kicks the can down the road." The bill "does nothing to reform our long-term spending problems" and it "postpones sequestration," placing the defense of the nation at risk.

In the end, the bill passed the House on the wings of mostly Democratic votes, 257-157. And the deal is bittersweet: It was good to take action to avoid market chaos and automatic tax increases, but the deal does little to address federal spending and the long-term problems caused by our $16 trillion debt. Instead, it simply postpones those issues. Both tax increases and spending cuts are needed to fix the nation's debt problem.

We can expect more fighting, more critical deadlines, and more blustering as a new Congress (to be sworn in today) and the president lock horns once again in a couple of months (if not sooner). Ours is a divided nation with a divided government and vastly different views on government's proper role. Can we find a way to compromise, to meet in the middle, to live up to our motto, E Pluribus Unum, ("Out of many, one")? Only time will tell. In the meantime, keep your definitions of the terms "sequestration," and "debt ceiling" handy. You're sure to need them.