The "Fiscal Cliff" was supposed to be a failsafe mechanism. Unfortunately, it now appears likely to fail.
Just the threat of a sequester was supposed to ensure bipartisan consensus between Congress and the White House on a host of contentious issues of taxes and spending.
Yet the term “compromise” has become a dirty word in Washington. Therefore, not much gets done.
However, regardless of sequestration, the lion’s share of the U.S. Budget will go unscathed. This is because entitlement spending and interest on the national debt comprise most of the budget pie as well as future outlays.
Therefore, today’s petty politics continues to take precedence over rational governing. This partisan political folly is detrimental to the American people, the U.S. economy and global markets (which cower at the notion of U.S. economic uncertainty and fiscal instability).
Both chambers of Congress have abdicated responsibility and accountability by preferring to antagonize their political opponents rather than compromise in good faith. This is nothing short of Washington gone wild!
The resulting political environment in Washington has become so toxic that Congress chose to skip town for an extra-long vacation which began over President’s Day weekend and won’t end until the week of Feb. 25.
In effect, Congressmen and women went AWOL on the American people -- whom they purport to represent – even as the nation edges closer to falling off the Fiscal Cliff.
This leaves Congress with only a few short days to take meaningful legislative action to avert the Fiscal Cliff – even if that means merely kicking-the-can down the road once again.
The irony here is that sequestration only affects discretionary spending by government agencies, which is an exceedingly small slice of the overall budget pie. The $85 billion in automatic cuts, across-the-board and government-wide, will neither make a dent in the ballooning national debt nor erase the budget deficit.
The last time America boasted a budget surplus was during the Presidency of Bill Clinton.
To truly get America’s fiscal house in order, Congress and the President know they need to put petty politics aside and bravely tackle historic entitlement reform – that is, the future solvency of Medicare, Medicaid and Social Security (the non-discretionary spending that increasingly engulfs most of the government budget – in addition to paying an ever increasing amount of interest on the national debt).
Sequestration obscures fiscal reality because it won’t address the macro issues at the heart of the budget deficit and national debt. Sequestration is therefore the political equivalent of putting a Band-Aid on a gaping wound gushing blood. It won’t really help and will likely do more harm than good.
Widespread Economic Pain
Going over the Fiscal Cliff will negatively impact far more people than just federal employees. The economic pain will be felt by most Americans as it trickles down to all levels of the middle class and the poor.
When public sector employees don’t get paid they spend less money, and perhaps even stop paying big bills like the mortgage or rent. This hurts consumer confidence and drives up costs for small businesses, potentially resulting in private sector layoffs as well as an abrupt halt to hiring.
Yet interestingly enough, as always, the rich and super rich will escape the most economic harm -- a category most members of Congress easily fall into.
The bottom line here is that going over the Fiscal Cliff will sucker punch the U.S. economy in the gut, perhaps even resulting in renewed recession – a worst case scenario.
We know by now that sequestration has led to partisan finger pointing, which will only become more widespread. But who is really to blame for this precarious predicament?
We all are – yes, that’s right.
Why? Because too many Americans ignore the political process altogether and don’t even register to vote. Further, many eligible voters don’t bother to vote either because of political cynicism, indifference, frustration, or just plain laziness.
Those who go to the ballot box include a large number of party activists who continue to naively elect and reelect members of Congress who do next to nothing – lest play politics, engage in pork barrel spending, and raise money for their next campaign.
Thus Congress continues to place political self-interest over the interests of the American people.
This is not how an effectively functioning democracy ought to work.
** All views and opinion expressed herein are those of the author only.