The News Courier in Athens, Alabama

State and Nation

January 2, 2013

Cliff averted, it's on to the next fiscal crisis

(Continued)

The alternative was going over the cliff, an economy-punching half-trillion-dollar combination of sweeping tax increases and spending cuts. Despite the deal, the government partially went over the brink anyway with the expiration of a two-year cut in Social Security payroll taxes of two percentage points.

Action inside a dysfunctional Washington now only comes with binding deadlines. So, naturally, this week's hard-fought bargain sets up another crisis in two months, when painful across-the-board spending cuts to the Pentagon and domestic programs are set to kick in and the government runs out of the ability to juggle its $16.4 trillion debt without having to borrow more money.

Unless Congress increases or allows Obama to increase that borrowing cap, the government risks a first-ever default on U.S. obligations. Republicans will use this as an opportunity to leverage more spending cuts from Obama, just like they did in the summer of 2011.

House Speaker John Boehner, R-Ohio, vows that any increase in the debt limit — which needs to be enacted by Congress by the end of February or sometime in March — must be accompanied by an equal amount in cuts to federal spending. That puts him on yet another collision course with Obama, who has vowed anew that he won't let haggling over spending cuts complicate the debate over the debt limit.

The cliff compromise represented the first time since 1990 that Republicans condoned a tax increase. That has whipped up a fury among tea party conservatives and increased the pressure on Boehner to adopt a hard line in coming confrontations over the borrowing cap and the spending cuts that won only a two-month reprieve in this weeks' deal.

Put simply, House Republicans are demanding new spending cuts — possibly through changes in Social Security and Medicare benefit formulas — as a scalp, and they're dead set against raising more revenues through anything less than an overhaul of the tax code now that Obama has won higher taxes on the wealthy.

Text Only
State and Nation
Photos


Poll

Do you believe America will ever make another manned flight to the moon or another planet?

Yes
No
     View Results
Facebook
AP Video
Disabled Veterans Memorial Nearing Completion Last Mass Lynching in U.S. Remains Unsolved Home-sharing Programs Help Seniors Ex-NYC Mayor: US Should Allow Flights to Israel Clinton: "AIDS-Free Generation Within Our Reach" Judge Ponders Overturning Colo. Gay Marriage Ban Airlines Halt Travel to Israel Amid Violence NYPD Chief Calls for 'use of Force' Retraining VA Nominee McDonald Goes Before Congress Bush: Don't Worry, Sugarland Isn't Breaking Up US Official: Most Migrant Children to Be Removed Police Probing Brooklyn Bridge Flag Switch CDC Head Concerned About a Post-antibiotic Era Raw: First Lady Says `Drink Up' More Water Courts Conflicted Over Healthcare Law Holder Urges Bipartisanship on Immigration Raw: Truck, Train Crash Leads to Fireball US Airlines Cancel Israel Flights Obama Signs Workforce Training Law Crash Victims' Remains Reach Ukraine-held City
Twitter Updates
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Stocks
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Business Marquee