DENNIS SEID: Fiscal cliff a danger for all

By Dennis Seid/NEMS Daily Journal

The presidential election is over. Now comes the hard part. With more than $1 billion spent on the campaign trail, we’re back where we started: a Democratic-controlled White House and U.S. Senate and a Republican-controlled House of Representatives.
Either we have continued gridlock or true bipartisanship. If we have the former, then we all fall off the fiscal cliff everyone’s been talking about.
That “cliff” is the combination of $800 billion in mandatory cuts on domestic and defense programs and the expiration of the Bush-era tax cuts, payroll tax cuts and other temporary tax-relief efforts.
The deficit-reduction agreement reached last year expires Dec. 31, and if a new deal isn’t reached, those cuts go into effect.
The good news: The U.S. government could start saving $600 billion starting next year.
The bad news: Most economists and other experts believe such a drastic whack would send our still-fragile economy back into a recession.
But for many people, the recession has yet to end. Falling off the fiscal cliff would worsen their problems.
The National Association of Manufacturers calls it an abyss because no one knows where the bottom is.
Republicans think keeping tax rates low and cutting entitlement programs is the best course to help spur growth. Democrats think higher government spending works better.
On Wednesday, House Majority Leader John Boehner appealed for a “balanced approach” to avoid the fiscal cliff. His proposal would extend current tax rates for another year for everyone, including the wealthy. But Obama and the Democrats won’t budge on any proposal keeping the lower rates on income above $250,000 for couples and $200,000 for singles.
Obama wants the top income tax rate to rise from 35 percent to 39.6 percent, the rate in effect during President Bill Clinton’s term.
Like it or not, the country saw strong economic growth then. And despite an impeachment threat, Congress and the White House hammered out compromises.
Boehner also proposed temporarily halting automatic budget cuts across military and domestic programs that both sides accepted last year in order to forestall those draconian cuts.
The lame duck session of Congress has a few scant weeks to do something wise. Both sides have to give in.
You can compromise while still holding on to your principles if you’re working for the greater good.
There are signs, albeit nothing dramatic, that the economy is improving. But driving straight ahead off the cliff, full-speed ahead will lead only to disaster for all of us.
That infamous Mayan prediction says the world will end Dec. 21. That’s 10 days before those cuts begin.
We don’t need the Democrats and Republicans to be the Mayans’ backup plan.
So let true bipartisanship prevail for the 100 percent of American who don’t want – and can’t afford – another recession.
Contact Business Editor Dennis Seid at (662) 678-1578 or at dennis.seid@journalinc.com.