Maybe Washington Inches Back from the Cliff, or Maybe Not

July 31st, 2012
in econ_news, syndication

breaking-news-130pxEconintersect:  The headlines sounded promising that some progress was being made on the fiscal cliff problem.  Speaker John Boehner and Democratic Senate Majority Leader have reached a deal that will keep the government funded for six months after September, when the current fiscal year budget ends.  According to Richard McGregor in the Financial Times, the deal will keep spending limits established in the 2011 Budget Control Act but will not include some of the most draconian cuts that have been demanded by some Republicans.

Follow up:

From the Financial Times:

… the deal averts a partisan clash leading to a possible government shutdown, something that neither party wants in the lead-up to the election.

The Republicans were especially damaged by brinkmanship concerning last year’s budget showdown over extending the US’s borrowing limits, and Mr Boehner has been keen to avoid a repeat.

In what has been released so far there is no indication that the fiscal cliff issue which arrives at midnight on December 31 of this year has been addressed by this agreement.  From Reuters:

If passed by Congress, the deal for a six-month spending extension eliminates one layer of difficult year-end bills Congress must grapple with just after the election as it deals with the "fiscal cliff" of expiring tax cuts, automatic spending cuts, a debt-limit increase and other fiscal deadlines that economists say if not averted could harm an already-weak economy.

John Lounsbury


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1 comment

  1. ghenghis khan says :

    this is how we begin to work together. best news from Washington DC in a decade. EASILY. Not that Congress needs me to tell them that of course. I did unleash an epic rant on Congress over a ZH this weekend as everyone knows. "Gotta know when to hold 'em, know when to fold 'em" and as a consequence the American people owe these folks a debt of gratitude. Not that Congress will get that of course. So to the extent that it matters vis a vis me "on behalf of the American people I extend a heartfelt thanx and an atta boyz and girlz." May it be a sign of things of come...

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