Fiscal Cliff Bar | Bad Seeds | Reconstituted
Fiscal Cliff Bar
In the summer of 2011, President Obama and House Majority Leader John Boehner convened to determine spending cuts and revenue increases to offset the ever-growing deficit problem. A “grand bargain” between the two could not be reached. A “supercommittee” of House and Senate leaders was then charged with identifying spending cuts for the fiscal year 2013, but failed to come to a consensus.
Should no further agreement be reached, under the Budget Control Act of 2011, mandatory tax increases and spending cuts, or “sequestrations” will go into effect at the beginning of 2013.
As Ben Bernanke, chairman of the Federal Reserve, told the House Financial Services Committee, “Under current law, on January 1, 2013, there’s going to be a massive fiscal cliff of large spending cuts and tax increases. I hope that Congress will look at that and figure out ways to achieve the same long-run fiscal improvement without having it all happen at one date." NEXT >