Congressional procrastination could lead to chaotic decision-making on the federal budget after the November elections, but many economists believe this procrastination is already harming the economy.
The damage stems from widespread uncertainty over what elected officials will do, if anything, about the “fiscal cliff” – a combination of sharp “automatic” spending cuts and the scheduled expiration of tax cuts at year’s end.
Beginning in January, approximately $109 billion in across-the-board spending cuts are scheduled to automatically take effect. Known in budget policy circles as a “sequester,” these cuts are unusual in that the executive branch directs how the spending cuts occur, as opposed to the traditional locus for such cuts -- the congressional Appropriations Committees.
Updated 8/17 with "History of Debt" infographic below
The Concord Coalition is proud to be partnering with a new effort called "Face the Facts USA." This nonpartisan initiative is a project of the George Washington University School of Media and Public Affairs and will be providing a new fact every day until the election (for 100 total).
Rep. Steven LaTourette’s announcement this week that he will not seek re-election underscores the difficulties that face elected officials who try to take a constructive, bipartisan approach to dealing with the nation’s most important challenges – notably the need for fundamental fiscal reforms.
The severe fiscal, financial and economic difficulties in Europe underscore the need for Washington to develop credible plans for comprehensive, long-term fiscal reforms -- in part because spillover problems from Europe could well aggravate U.S. budget challenges.
But Europe’s experience also cautions against excessive austerity measures that can turn a weak recovery into another recession. “These are critical times,” says Senate Budget Committee Chairman Kent Conrad, “and we’ve got to be smart about how we get back on track.”
The Congressional Budget Office (CBO) today estimated that repealing the 2010 Affordable Care Act (ACA) would increase federal budget deficits between next year and 2022 by around $109 billion, only a small change from previous estimates. The CBO suggests that this can also be considered a rough estimate for how much the ACA reduces the deficit over the same time period.
Today Concord Coalition Co-Chair Sam Nunn, a former U.S. senator from Georgia, helped launch the Campaign to Fix the Debt. This project is a non-partisan initiative to put America on a better fiscal and economic path. Nunn is a member of the campaign's steering committee.