Businessweek reports: Jan. 1, 2013, seemed a long way off in the Chicken Summer of 2011. That’s when Congress reached a deal that ended, or rather postponed, the debt-ceiling crisis by declaring that automatic cuts in federal spending would be triggered at the beginning of 2013, unless a bipartisan supercommittee came up with a sweeping plan for reducing the deficit. (Predictably, it didn’t.) Even last August some House Democrats worried that their party had given away too much. Emanuel Cleaver of Kansas City, Mo., called the debt deal a “sugar-coated Satan sandwich.” Steve Cohen of Tennessee was even more imaginative. “I fear it’s a Trojan horse,” he said in floor debate on Aug. 1. “And if you look inside that Trojan horse, it’s Scylla and Charybdis inside, the whirlpools and the shoals.”
Now the Trojan horse with the roiling belly is staring us in the eye. With the attention of the political class fixated on the presidential campaign, Washington is in danger of getting caught in a suffocating fiscal bind. If Congress does nothing between now and January to change the course of policy, a combination of mandatory spending reductions and expiring tax cuts will kick in—depriving the economy of oxygen and imperiling a recovery likely to remain fragile through the end of 2012. Congress could inadvertently send the U.S. economy hurtling over what Federal Reserve Chairman Ben Bernanke recently called a “massive fiscal cliff of large spending cuts and tax increases…”
Read more at http://www.businessweek.com/articles/2012-03-29/the-end-is-coming-january-1-2013
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