Erskine Bowles, left, accompanied by former Wyoming Sen. Alan Simpson, co-chairmen of President Barack Obama's bipartisan deficit commission, take part in a news conference on Capitol Hill in Washington Wednesday, Nov. 10, 2010.
Alex Brandon, Associated Press
THE FISCAL CLIFF
The looming combination of events often called the "fiscal cliff" includes:
December 2012: Expiration of Bush tax cuts, the current Medicare doctor reimbursement fix, extended unemployment insurance benefits, the alternative minimum tax patch, current estate and gift tax rates.
January 2013: $1.2 trillion in defense and domestic spending "sequestration" cuts kick in.
February 2013: National debt ceiling could be breached.
Source: Bipartisan Policy Center
Editorial: Sounding the alarm on the 'fiscal cliff'
- Article by: EDITORIAL BOARD
- October 6, 2012 - 6:53 PM
The last thing a nation still struggling to shake off recession needs is a downturn caused by political mismanagement. Yet that's what lies ahead as the calendar turns to 2013 in a few short months.
The reckless combination of expiring tax cuts and meat-axe spending reductions -- triggered by the failure of a congressional "supercommittee" to reach a long-term debt reduction deal last year -- has been dubbed the "fiscal cliff" for these policies' frightening likely effect on the fragile economy. The nation's debt ceiling could be breached in February. Experts are warning that gridlock could plunge the economy back into a recession and cost up to 2 million jobs.
Heading off such financial wreckage is Job One for the nation's political leadership. Yet Wednesday's presidential debate utterly ignored this looming meltdown. Instead, President Obama and Mitt Romney continued the irresponsible political tradition of soft-pedaling spending cuts, pandering to senior citizens and implying that someone else will foot the bill for the nation's needs.
All this was part of the urgent message Thursday from two respected deficit hawks -- Alan Simpson and Erskine Bowles, the authors of a high-profile debt-reduction report -- who were in Minnesota this week to sound the alarm about fiscal cliff inaction.
Bowles, especially, was blunt about the need for speed, predicting that financial markets will react "severely" if the nation doesn't act swiftly and smartly. Already he attributes economic sluggishness to political inaction. "There's not a company I know that isn't hoarding cash today because of the lack of certainty.''
The 81-year-old Simpson is a former Republican senator from Wyoming. Bowles, a Democrat, was President Clinton's chief of staff. They cochaired President Obama's National Commission on Fiscal Responsibility and Reform, then have watched as their debt-reduction report has gathered dust since its release in late 2010. The report is now back in the spotlight as the presidential campaign heats up and awareness grows of the fiscal cliff threat.
Simpson and Bowles said on Thursday that there's not enough support yet from congressional leadership for a "grand bargain" on long-term spending cuts and tax increases needed to reduce the federal deficit and debt. But they're heartened by a growing bipartisan contingent in Congress seriously committed to a deal.
Bowles said he wouldn't list Minnesota's two senators in that group, but said Democratic Sen. Amy Klobuchar is supportive and "gettable." Klobuchar, a popular politician and gifted communicator, would strengthen her policy bona fides by taking a leadership role on this.
Simpson and Bowles' straight talk this week contrasted strikingly with the political pablum delivered by the presidential contenders. Simpson and Bowles lashed out at the usual suspects -- congressional intransigence and greedy special interests. But they also spoke bluntly about voters' misconceptions about the main drivers of the federal deficit.
Many think that foreign aid, congressional pensions, earmarks, and waste and fraud are the main culprits. The reality: "That's peanuts,'' said Bowles. The actual, key deficit drivers: defense spending and health care entitlements such as Medicare and Medicaid.
Voters don't need to become federal budget experts. They do need to be astute judges of those who will vote on the public's behalf on these key issues. This year, especially, voters should put a priority on electing politicians who can set aside ideology, draw from the best ideas, make a deal and get something done.
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