American Pessimism and the Fiscal Cliff

Posted by & filed under Uncategorized.

by Richard Thompson, Hillsdale College

As the future of this country dangles off the edge of the fiscal cliff, Americans are becoming more skeptical of President Obama’s and Congress’ resolve to effectively balance the budget. According to a Gallup poll conducted on Dec. 22, 48% of surveyed Americans are doubtful that Congress will reach a budget agreement by Jan. 1 and avoid automatic spending cuts. This greatly shifted from the trend seen in early December, which showed that only 39% of Americans doubted congressional competence.

Though there has been a slight movement towards American optimism in Democratic leaders’ abilities in the past week, many analysts point to Obama’s handling of the Newtown shooting as the reason behind this upwards trend. Regardless of the cause of the recent Democratic upswing, there has been no change in the approval of Republican leaders, which is still hovering around 25%.

Another Gallup poll shows that two-thirds of Americans feel that Congress must compromise in order for a viable solution to be reached.

“It’s up to the Senate Minority Leader not to block a vote, and it’s up to the House Republican leader, the Speaker of the House … to allow a vote,” a senior administration official said. In other words, Americans feel that the country’s financial future rests not on one party but depends on bipartisan resolution.

But, as the situation now stands, there does not seem to be any hope of agreement in sight. In response to President Obama’s plan to raise taxes of those making $250,000 or more, Speaker of the House John Boehner proposed his “Plan B,” which would increase income rates of those making more than $1 million.

This turned out to be an absolute failure, as even House Republicans refused to rally behind the Speaker’s plan. In a proverbial washing of hands, Boehner passed the responsibility on to Democratic leaders.

“Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff,” Boehner said last Thursday.

If Congress is not able to come to a consensus on the budget by Jan. 1, then $1.2 trillion worth of spending cuts will take effect on Jan. 2. These cuts would include but are not limited to a 9.4% decrease in defense spending as well as an 8.2% cut in energy subsidies and housing assistance. According to experts, this would be damaging to economic growth and increase unemployment rates.

The pessimism in the midst of the country’s fiscal problems is discouraging to say the least, but there are still a few days left until a decision needs to be made. There is still hope of avoiding the treacherous fiscal cliff.  It may just take a Christmas miracle.

Leave a Reply

  • (will not be published)

XHTML: You can use these tags: <a href="" title="" rel=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>