The fiscal cliff may have been averted when Congress passed and the president signed the American Taxpayer Relief Act of 2012, but the threat of unsustainable deficits and entitlement spending still looms. With tax rates set to rise for families with income above $450,000 and individuals above $400,000 and a two-month delay of the sequester, the deal provides only a temporary reprieve from fiscal mayhem. The postponed sequestration is just around the corner in March, and the federal government is set to again reach, in the next few months, the debt limit. AEI’s team of economists has been analyzing the developments and offering suggestions for the future of America's fiscal path.
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The House has nine legislative days left after recess to pass the appropriations bills that make up most of the government we see, and try to reconcile them with the Senate. The chances of that happening before Oct. 1? Zero.
Congressional Republicans have had quite a comeback. In January, the GOP was forced to vote for a major tax hike with zero spending cuts. Now it is President Obama who has been forced to accept spending cuts with no tax hike. Who says divided government doesn’t work?
It would be the ultimate fiscal cliff. A group of House Republicans wants to put an expiration date on the 75,000-page U.S. tax code. The Tax Code Termination Act would require the repeal of the entire code in 2017 — except for the bits dealing with Social Security and Medicare — with a new system ready to go for the following year.
At the heart of the nation’s fiscal challenges are the rising costs of the major health care entitlement programs. The prospects for seriously addressing these rising costs is not promising in the president's second term in large part because there is a sense in his administration and among congressional Democrats that Obamacare has already largely solved the problem.
Major corporations profiting from Obama policies are bankrolling President Obama's official inaugural committee. While we know the names of the donors to Obama's inaugural, we don't know much more, because Obama is once again trampling his promises of transparency.
To judge from his surly demeanor and defiant words at his press conference Monday, Barack Obama begins his second term with a strategy to defeat and humiliate Republicans rather than a strategy to govern.