October 1, 2014

Inaction on ‘Fiscal Cliff’ Threatens Immediate Harm

  • The federal budget is an expression of our country's values. Where we choose to spend and at what levels, how and who we tax, and the borrowing we...

There is growing concern about how congressional procrastination on key budget decisions could already be harming the economy. The concern stems from widespread public 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.

The Wall Street Journal recently reported on a survey it conducted of 47 economists, noting their worries about the growing economic cost of congressional inaction. Without some legislative changes, many warn, the combined economic effects of the fiscal cliff could substantially cut U.S. growth next year.

“The general expectation in Washington is that elected officials will not take action on the fiscal cliff until after the elections, despite encouragement throughout much of this year from The Concord Coalition and many other analysts and groups to work out a bipartisan action plan as soon as possible,” Concord Communications Director Steve Winn writes in a recent blog post.

“Ideally,” he adds, “this would have been done months ago in the context of comprehensive fiscal reforms to finally put the federal budget on a responsible and sustainable long-term path.”