Presidential debates: why $600 billion 'fiscal cliff' was barely mentioned (+video)
Neither President Obama nor Mitt Romney has said how he would deal with mandated spending cuts and a tax hike set to take hold in 2013. That's because any plan to avoid the 'fiscal cliff' is likely to be unpopular with voters.
The third and final presidential debate between President Obama and Mitt Romney in Boca Raton, Fla., on Monday night produced one word that neither candidate had uttered in any of their previous two prime-time tilts: sequester.Skip to next paragraph
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The sequester – $109 billion in automatic spending cuts scheduled for Jan. 1 – is only one part of the “fiscal cliff,” a package encompassing more than $600 billion in higher taxes and lower government spending that lands on America’s doorstep in the new year.
Yet the larger "fiscal cliff" issue didn’t get a mention by the presidential contenders or their vice presidential running mates in any of the four debates between the two sides.
“The silence from both presidential campaigns and the Congress of the United States has been thunderous on this question,” says William Galston, a senior fellow at the Brookings Institution, a Washington think tank. “Nobody wants to talk about it because all of the choices are so difficult.”
On Monday night, the only mention came when Mr. Romney criticized half of the sequester – cuts to defense spending – while Mr. Obama, in a surprise move, simply declared that the sequester "will not happen."
The president's statement appears to undercut what has been a Senate Democratic negotiating strategy: to use the threat of the sequester to leverage concessions from Republicans on raising taxes on Americans with the highest incomes. GOP leaders said they were surprised by the announcement, especially as the president has yet to present a plan to avoid the sequester.
Moreover, the presidential campaign has failed to prepare the American public for tough choices that face the newly elected president and Congress immediately after the Nov. 6 election.
The cliff, a term coined by Federal Reserve Chairman Ben Bernanke, includes the expiration of the Bush-era tax cuts for all Americans, sharply lower payments for health-care providers for Medicare patients, and the sequester, which will indiscriminately slash budgets at the Defense Department and non-defense expenditures like social services and education, among other issues.
That hit, the Congressional Budget Office (CBO) estimates, is likely to send the US economy into a recession. And while Congress may do what it does best – put the issue off for some time before scampering home for Christmas break – that route is fraught with peril from bond-ratings agencies threatening to downgrade America’s credit rating should Washington again cop out of its financial responsibilities.
“There’s really been no discussion of the elephant in the room,” says Marc Goldwein, a senior policy director at the Committee for a Responsible Federal Budget, a nonpartisan group that advocates fiscal responsibility. “I’m not sure [the fiscal cliff is] our biggest threat, but it’s our most immediate threat to the economy.”
That lack of discussion could be troublesome for whichever man is elected on Nov. 6, as weighty choices about taxes and spending must be made quickly – and without laying the groundwork or obtaining a mandate from voters for moving a deal through Congress.
“Talking about it, you emphasize, ‘It’s really a problem,’ ” says Douglas Holtz-Eakin, a former CBO director and the chief economic policy adviser for Sen. John McCain’s presidential run in 2008. “The American people need to know it’s really a problem.”
Both Romney and Obama have laid out their plans for handling America’s overall debt and deficit in broad terms, including accepting the claim by bipartisan, blue-ribbon panels that the nation needs to trim its debt by some $4 trillion over the next decade.