When I hear the term “fiscal cliff,” I imagine President Barack Obama and Speaker John Boehner fighting over the wheel of a truck as it barrels towards the edge of the Grand Canyon. Obama is pulling left and Boehner right as a suspenseful cinematic score plays in the background.
This whole cliff was really sprung on us out of the blue. Political science professor John DiIulio explains that the fiscal cliff deal is happening on such short notice because “leaders in both parties mutually risked painting themselves into this corner so they could get on with the election.” In other words, they procrastinated.
Imagine you’re taking a ton of really hard classes. You’ve had all semester to study, but of course you didn’t — you had other things to do (in this analogy, the other things to do were watching and waiting to see who would win a presidential election — which, coincidently, is the reason I didn’t study at the beginning of the semester).
Next thing you know, it’s December and finals are coming. But wait — all of your finals are on the exact same day. If only you had begun preparing sooner.
That is essentially the situation that lawmakers find themselves in today as we approach the edge of the fiscal cliff. The only difference is that it isn’t your GPA that hangs in the balance — it’s the global economy.
When politicians and pundits talk about putting an issue off, they use the term “kicking the can down the road.” The $500 billion in tax increases and $200 billion in spending cuts that are set to take place are essentially a pile of cans that have all been kicked to the same place down the road … Jan. 1.
The biggest chunk of revenue increases comes from the expiration of the Bush tax cuts. Although Obama extended this $203 billion tax cut in 2010, it is now set to expire … on Jan. 1.
Other big revenue increases will come when the payroll tax holiday and 2009 stimulus tax cuts end. Both of these are set to expire … on Jan. 1.
Expensive moves must be made on the alternative minimum tax and corporate tax rates. Of course this needs to be done … by Jan. 1.
The biggest cuts in spending come from the August 2011 debt deal, which set automatic cuts to Medicare and defense spending to occur … on Jan. 1.
So there you have it: the federal government has all of its finals on the same day … Jan. 1.
Some type of deal has to be made on every issue. Annenberg School for Communication professor Alvin Felzenberg explains that a deal can be made, but will be challenging if both sides continue to “refuse to see the other person’s point of view and are prepared to call their bluff.”
Although a deal is all we hear about now, we didn’t talk about it during the election. While the deficit is scary, it isn’t what people or candidates care about. This country, as it should, cares about jobs and economic stability.
On the fiscal cliff, we are tricked into feeling like we are about to solve a long-term problem (the deficit). But the long-term problem isn’t and shouldn’t be the goal. We need to think of the short term: maintaining economic stability and expanding job creation. So don’t expect the fiscal cliff negotiations to result in any substantial changes to balancing the budget.
As DiIulio points out, “averting the fiscal cliff is a far cry from addressing this country’s multiple financial problems.”
The deal we see will not fix the complicated tax code or reform entitlement programs, but it will help in the short term. It will be a sign of economic and political stability to a world that doubts we have any.
The politics of reducing the deficit are justified, but the timing is ill-conceived. We need to fix the deficit, but we ought to kick the can down the road a few more times until our economy is more robust and there is more faith in our political system.
Adam Silver is a College junior and masters of public administration candidate from Scottsdale, Ariz. “The Silver Lining” appears every Wednesday. His email address is firstname.lastname@example.org and you can follow him @adamtsilver.