The Daily Ticker Blog

Comment: Dysfunctional DC Driving US Close to 'Cliff'


All of November and half of December have now gone by, and our government still hasn't reached a deal to avoid the "fiscal cliff."

This "cliff," you will recall, will cause sharp tax increases and spending cuts to take place starting Jan. 1.

While the U.S. certainly needs to raise taxes and cut spending to begin to work its way out of its monstrous deficit problem, doing it sharply will threaten a fragile economic recovery. Many economists, in fact, believe the cliff will cause the economy to plunge back into recession.

Related: Let's Take the Fiscal Cliff Plunge: Bruce Bartlett

Our government appears to understand the risks and undesirability of this happening.

But, at least externally, both parties are clinging fast to their respective demands.

The biggest sticking point remains income tax rates on the highest earning Americans. Democrats want these tax rates to rise (which they will anyway, sharply, if no deal is reached). Republicans want them to stay put. And neither side is willing to budge.

Related: Higher Taxes Will Create Jobs and Cut the Deficit: David Cay Johnston

Meanwhile the country careens ever closer to the cliff.

Most observers assumed that any deal on the cliff would come down to the wire, which it certainly has. Some in Washington are now talking about the deal slipping into January. Others warn that, if the deal slips into January, it will never get done.

Still others assume that what's going on in Washington is just "kabuki" theater and that lawmakers will reveal a deal at the 11th hour and try to make themselves look heroic for having achieved it.

Related: Unemployment Benefits Hang on "Fiscal Cliff" Deal

Unfortunately, that's believable. Most of what happens in Washington these days seems to have only one purpose -- to get Senators and Congressmen reelected.

This country deserves leaders who go to Washington with the mission of actually leading. It's too bad that our current government apparently doesn't include any of those folks.

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