Given all the discussion about the Fiscal Cliff, it's important to understand what it is, how we got here, and why it's a problem. As a reminder, the Fiscal Cliff involves the simultanteous expiration of the Bush tax cuts, the payroll tax cut, and mandatory cuts in defense and discretionary program beginning in January 2013. What in the world does that mean? The following are some useful resources for understanding the Fiscal Cliff.
How
we got to this point (Pete Peterson Foundation) - analysis of budget
agreement that raised the debt ceiling in Aug 2011
- Sequestration: over $100 billion in spending cuts in 2013 - half in defense,
half in other discretionary programs (not entitlements)
- Expiration of payroll tax cut (2% tax cut that was part of the stimulus in
2011 and 2012)
Impact on the economy
Fix the Debt: a bipartisan
organization designed to educate the public about the debt problem as well as to
promote a credible plan to contain the growth of the national debt
In future posts, I'll discuss specific aspects of the Fiscal Cliff including the big picture as well as details as to what's involved, the current status, and the likely impact.
