The “Fiscal Cliff” Watch…Continues
If you do a quick internet search of “fiscal cliff” you would get possibly hundreds of new articles describing what is the “fiscal cliff”, when the cliff may happen, and what Congress needs to do to avert the U.S. economy from falling off the “fiscal cliff”. You can even find articles explaining if the “fiscal cliff” is even real.
In brief, the “fiscal cliff” is defined as several economic quandaries that Congress needs to address by the end of their congressional session in December or the first of January. In no particular order of emergency; the temporary tax cuts passed under George W. Bush, and extended again under Barack Obama, are set to expire January 2013. Conventional wisdom expounds that if the tax cuts expire the impact of this change would be hard at a very fragile time in the economy.
The sequester, established under the Budget Control Act during the 2011 summer, would cut both the defense and non-defense discretionary budgets equally estimated to be about eight percent across the board cuts, to reach a $1.2 trillion in savings. The sequester is set to take effect the first of January. Cuts to defense and non-defense would impact jobs, our public health, infrastructure, and educational programs.
In addition to the problems above, the United States is projected to reach the debt ceiling again between now and the end of the year, the exact timing of when it is reached depends on U.S. Treasury accounting measures. Congress would need to vote another increase in the debt ceiling to avoid default on our national debt. As you may remember, the last vote to raise the debt ceiling, during the summer of 2011, was such a political hot potato and the lack of action caused a down-grading to the U.S. credit rating.
Although all these problems are devastating, the sequester, with it’s across the board cuts could have the most widely felt the impact. Some Members of Congress recognize the vast impact sequester may have on defense and non-defense programs and have proposed language to require the military, the Office of Management and Budget (OMB) and the president to report on the effects of sequester on defense and domestic programs, with short deadlines so lawmakers would have time to consider the implications.
The House Budget Committee marked up The Sequestration Transparency Act of 2012 (H.R. 5872) on June 27th. The bill, and the substitution amendment, proposed by Chairman Ryan both required reports from the Office of Management and Budget (OMB) on the effects of sequestration within 30 days of enactment. The House bill is meant to be the companion bill to Senator Murray’s already passed amendment to the Senate Farm Bill, which was cosponsored by Senator McCain, but is far less detailed.
The ANA has participated with other Non-Defense Discretionary (NDD) organizations and signed a letter to the Hill, along with over 3,000 other federal, state and local organizations. The letter asks law makers to take a “balanced approach to deficit reduction that does not include further cuts to NDD programs.”
ANA will continue to monitor this issue.