Falling off the Economic Cliff

While my office deals more with state policy issues, I have been able to see some overlap between federal policy and state policy. For instance one of the most recent examples that I have seen through my internship experience is health care reform. While the federal government was busy debating and trying to pass the Affordable Care Act, many states had already set in motion there own types of health care reform, many parts of these laws would protect the states from the costly mandates and requirements of the Patient Protection and Afforable Care Act.  Many states have been able to effectively limit through their own legislation the reach of the federal government into what is considered strictly state issues. This is just one example of how I have seen connections between my internship and the “real world”.

Being in D.C has given me a chance to see more sides of a policy argument as there are thousands of organizations that feature speakers, panels and write publications about these issues. This has been great to be able to gain a spectrum of knowledge about the topic from experts and those who work in the field. One of the domestic policy issues that I have seen more about lately is the issue of the growing federal deficit. More and more, I have been reading articles from organizations that have studied and analyzed the current economic situation of the US, in which many believe that if we do not change our current economic track we are sure to fall off the “fiscal cliff” or to end up in a situation very similar to Greece.

In an article from the American Enterprise Institute, policy experts agreed that if “ Congress and the president do not act together to forestall the automatic outcomes, the United States will head into recession, with growth shrinking significantly through the first half of 2013”. The Congressional Budget Office in a statement has agreed that economic policy actions must be decided on before Congressional recess unless there is a want for automatic “across the board sequestering” cuts.  This would prove such a fiscal shock to an already weak and unbalanced economy that it “would reduce taxable income, increase unemployment, depress consumption and retard growth”.

 Fortunately, there is a solution that has been endorsed by several different groups including the Simpson-Bowles Commission, the Rivlin-Domenici task force and the Gang of Six. This plan includes a “combination of phased and balanced spending cuts, including all areas of spending, and tax increases phased in to replenish the revenue base that is now the lowest as a share of the gross domestic product in nearly 60 years.” However, with the partisan stalemate occurring in Congress and between President Obama, this seems like a lofty goal, especially as almost all Republican House members have signed the Grover Norquist “No new Taxes” pledge and most Democrats would be apposed to any reform or cuts to welfare and entitlement programs.

With this deep partisan divide, there seems like little wiggle room for compromise. Without quick action a series of events could culminate which would induce an economic storm of sorts, leaving a struggle economy behind for the next president to deal with who ever that may be.  The American political class has become so entrenched that they have refused to cooperate, bickering with each other, all while the problem sits unsolved. 

We need a fresh new class of citizen legislators that are willing to go in and actually accomplish what they promised while on the campaign trail. The establishment of congress, on both sides, needs to take a stand and act before we experience another deep recession. We can not leave these problems to linger only for the future generations to have to dig themselves out of a massive economic hole.