US Differs Debt Crisis

US lawmakers could push Fiscal Cliff deadlines into Y 2013

The US Congress may be arriving at a consensus on how to avoid falling off the Fiscal Cliff on 31 December by simply putting off its own deadline for most of the major year-end budget and tax decisions.

That approach would delay the day of reckoning while also allowing more time for compromise in a Congress that has battled for 2 yrs over how best to reduce huge budget deficits.

No formal agreements have been reached, however, and turning a consensus into an actual deal that avoids jolting the markets or economy will depend on the results of the November 6 general election.

The Cliff refers to the year-end deadline for the expiration of hundreds of billions of dollars worth of tax cuts and the triggering of $109-B in across-the-board spending cuts. The non-partisan Congressional Budget Office has said the scenario could throw the country into recession.

Congress created the hazardous end-of-year deadline in August 2011 when it agreed to a deficit deal as a way out of a deadlock over raising the US debt ceiling.

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In recent weeks, lawmakers from conservative Republicans to liberal Democrats in the Senate and House of Representatives, have alluded to surprisingly similar hopes for the high-stakes ?Lame Duck? work session that will follow the November presidential and congressional elections.

They would put aside the $109-B in ?automatic? across-the-board spending cuts that otherwise would hit military and domestic programs equally.

They would make some new, possibly smaller down payments on deficit-reduction for the near-term. Then they would write a new deadline, maybe 31 March or 30 June to come up with a $4-T deficit-reduction program over 10 yrs; and devise a new method for forcing a divided Congress to act.

The entire exercise would be aimed at finding a long-term fix for US fiscal problems without the jolt of indiscriminate spending cuts and tax hikes that would occur under current law.

The threat of a possible recession after such blanket spending cuts now preoccupies Washington.

Among the fearful are the big-company CEOs represented by the Business Roundtable, for example, and Ben Bernanke, the chairman of the US Federal Reserve, who briefed members of Congress this week after declaring that

Source: http://www.ibtimes.com/us-differs-debt-crisis-794671

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