Fiscal cliff negotiations show the incompetency of Congress
Published: Wednesday, January 16, 2013
Updated: Wednesday, January 16, 2013 00:01
December didn’t bring the end of the world as we know it, and the economy didn’t go into a catastrophic freefall. Mission accomplished.
Congress passed the American Taxpayer Relief Act of 2012, and the so-called “fiscal cliff” was averted. But the weeks, days and hours leading up to the plan’s introduction had those paying attention to the news shaking their heads. Former House Representative Ron Paul stated the fiscal cliff bill was passed in three minutes and Congress doesn’t even pretend to read what it’s handed anymore. We can’t help but think he’s right. Because while our country didn’t land in complete economic crisis and no alarms went off, the mess of the fiscal cliff was an embarrassment.
In case you weren’t paying attention, the country was in danger of going over what has been referred to as the fiscal cliff made possible by the Budget Control Act of 2011. The act was put into place because of lack of compromise and if Congress would address a $1 trillion budget gap with higher taxes or lower spending, and if not acted upon by the beginning of the new year, taxes would increase and potentially drive the economy into another recession.
It took until 11 p.m. on New Year’s Eve for a tentative deal to be made by the Senate and until after the clock struck for the House to approve it.
There are highs and lows to the deal, but the stalemate left both sides sour. Both sides compromised on everything they were not willing to compromise on: higher taxes for America’s deepest pockets and a higher threshold for whose pockets are deep enough to face a higher tax rate. The deal also doesn’t address payroll taxes, so those tax cuts have expired, and it defers some of America’s major spending problems such as health care and multi-trillion dollar deficit reduction.
The deal doesn’t just affect struggling workers or wealthy couples; the result will have an effect on college students. While approving the tax portion of the cliff, the deal put off budget cuts for programs, delaying any new action for the next two months. Among those programs were FAFSA, leaving its future up in the air. The Federal Pell Grant, currently protected but up for debate in a year, is also a talking point.
The new deal has a lot of positives for higher education, including a five-year extension to the American Opportunity Tax Credit, which allows middle and low-income families a tax deduction of up to $2,500 a year for college expenses. However, unless Congress intervenes by March 1, higher education programs will face considerable reductions, including the Department of Defense aid for veterans looking to further their education and Department of Education programs. Sources of scholarship programs and research grants would also be affected.
House Speaker John Boehner led the parade of blatant incompetence, and despite strong opposition over his leadership, he was reelected as the Speaker of the new 113th Congress with a final vote of 220 to 192. In the early stages of fiscal cliff deals, Boehner stated he remained opposed to raising taxes on anyone but was also willing to compromise. But both parties showed an unwavering lack of desire to work together. And because of it, the country watched on as the government played with its money like a game of Monopoly.
The government does not care about the people; it cares about paychecks and its reputation – a reputation that has been faltering quickly. The 112th Congress was considered the worst in history and received an average approval rating of 15 percent over the course of 2012, the lowest ever in Gallup’s 38 years of testing.
Perhaps most important is the fact this is not the end of problems for Congress financially; a series of budget clashes are guaranteed in the near future. The Senate deal does not address sequestration – automatic cuts in spending – and has been delayed until March 1. The country hit its $16.4 trillion legal borrowing limit at the end of December, requiring the debt ceiling to be raised again.
No organization functions by waiting until the last minute until a major action had to be completed. Congress did the least possible amount of work and compromise it could to avoid the cliff, creating the cliff and then congratulating themselves for avoiding it.