Good News on the Fiscal Cliff?
Each day the Fiscal Cliff gets closer and closer, adding more uncertainty to our economic situation. But, as Deutsche Borse Group reports today, there is some cause for hope. With the Congressional Budget Office (CBO) having released a report giving lawmakers an estimate as to what would happen if the all the policies scheduled to happen at year end would occur, there is news that there has been ongoing discussions and negotiations behind the scenes to get the job done - and better yet, to do so by enacting a full, comprehensive fiscal plan.
To recap, the fiscal cliff is the expiration of a slew of policies, and the sequestration being activated, with the added bonus of needing to raise the debt ceiling. These policies combined, according to CBO would put the US economy into a double-dip recession for the first half of next year by having growth equal to negative 1.3 percent, but over the full year, would equal a still lackluster 0.5 percent.
As we have explained previously, and as CRFB president Maya MacGuineas recently explained, "Instead of going over the fiscal cliff or allowing an ever growing mountain of debt, we should rise to the challenge and enact a comprehensive plan with more targeted and thoughtfully crafted measures."
Thankfully, some are doing just that. As Senate Budget Committee Chairman Kent Conrad said, "Things are pretty quiet on the surface up here (in Congress), but beneath the surface there is a lot of careful, detailed and intense working occurring on a deficit reduction package, involving people from both parties."
The article continues:
"I think we all know the kind of plan we need to pass and pass very soon. But I can't tell you that there is sufficient support up here to pass it now. The mood must change. But things do change. Events happen. The situation in Europe worsens. We want to be ready if there is an opportunity," Conrad said.
Conrad said he is working with lawmakers both within the Senate Budget Committee and in informal groups such as the "Gang of Six" to develop a deficit reduction package.
"This is incredibly detailed, difficult work. It takes months and months of careful preparation to be ready with a plan. Some of us are determined to be ready pretty soon with a plan. We hope the political moment comes that allows us to move the package," he said.
"Both parties must move together on this. That's the only way it can happen," he said.
We hope this news leads to something real - the Fiscal Cliff is approaching and we need to act on it.