StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



Fiscal Cliff

Posted by Stan Collender
Last year's high-stakes, Perils-of-Pauline-like event known as the "fiscal cliff" (thank you Ben Bernanke for that label), was the federal budget debate's version of a scandal.
 
Members of Congress playing chicken with the government's finances, through a series of man-made fiscal disasters -- automatic tax increases, automatic spending cuts, allowing the debt ceiling to be reached, etc. -- was the height of irresponsibility.
 
So now, in addition to Watergate, Monicagate, and all the other Washington disgraceful events that have been similarly labeled, it's time to start calling what happened last November and December something new. "Fiscal cliff" is way too benign; the correct pejorative label is "Cliffgate."
 
Why bring this up now? We're looking a new fiscal cliff, that is, yet another cliffgate, later this year.
 
The Congressional Budget Office this week issued a short report showing that the so-called "extraordinary measures" -- what the U.S.
Posted by Stan Collender

Sunday, May 19, 2013, was one of the saddest and most notorious moments in the sordid history of the federal budget.

Let's start from the beginning.

It's December 2012 and House Republicans are facing a number of politically very difficult and unpalatable choices because taxes will go up automatically on January 1, the sequester will go into effect on January 2 and the by-now- commonplace-but-still-called "extraordinary" measures the Treasury has been using for several months to deal with the problems caused by not raising the debt ceiling are about to be exhausted.

The tax problem was dealt with by agreeing to a smaller increase than was set to happen under current law and then blaming the White House for it. The sequester was postponed until March 1 when both the GOP and the administration thought that the threat of cuts to domestic and military programs, respectively, would cause the other to back down.

But it was the unique and disgraceful way the debt ceiling was handled that deserves the scorn.

Posted by Stan Collender

When I was much younger, I helped start a monthly breakfast meeting for a handful of inside-the-beltway budget wonks.

Posted by Stan Collender

Are we really counting on this U.S.. Senate to avoid the fiscal cliff? 

The same U.S. Senate that hasn't been able to get 60 votes for much of anything the past four years?

The same U.S. Senate that with only four days left before the fiscal cliff hits would have to get unanimous consent to do anything?

The same U.S. Senate where only one senator can prevent something from happening?

The same U.S. Senate where Rand Paul (R-KY) and Marco Rubio (R-FL) have  nothing to lose and much to gain by being the senator who stops anything that can be characterized as a tax increase from happening?

That U.S. Senate?

Really?

Posted by Stan Collender

With less than a week to go before going over the fiscal cliff becomes the reality that common wisdom said absolutely could not happen, there are only a handful of ways this is going to go down.

1. The Big Deal. This isn't going to happen. Never mind that the political support doesn't exist to do the combined comprehensive tax and Medicaid/ Medicare/Social Security reform that is the basic definition of a big budget deal. Even if that political support did exist there simply isn't enough time left to get it done before January 1 and 2. I'm mentioning it here just to dismiss the notion out-of-hand before someone asks about it. Chance of happening: 0%.



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