First of all, the “fiscal cliff” is breached when the U.S. government allows the spending deficit to exceed legislated limit and spending authority.
The President, “working with” Congress must establish budgets and spending plans that keep operations within bounds. If they do not, then the financial markets will punish Americans by reducing its borrowing capacity and increasing interest on money borrowed otherwise exacerbating an intolerable situation.
Neither the President nor Congress are going to act on this until after November 6. If President Obama retains his incumbency, then he will likely stiff arm Congress into raising taxes on wealthy Americans. That will help a little.
He will accelerate withdrawal of troops from war fronts and initiate action to cancel some nonessential defense programs. He will also reduce programs throughout all government departments where savings can be achieved through consolidation and efficiencies. He will fight to protect essential social services and benefits.
Producing a viable plan and taking essential action will be possible when American voters produce a working government.
The President cannot act independently and that is why he is not addressing the problem until he sees his status. Let’s say that he loses the bid. Well, then expect him to be forced by Republicans to accept compromise that will not include action to increase revenue from wealthy Americans. Expect that the budget cutting buzz saw will inflict more pain on the Middle Class and poor.
Therefore, voters must pay attention to what they are doing. Remember, we are the fiscal cliff dwellers.
“Wall Street to Washington: Avoid the fiscal cliff!
By Jennifer Liberto @CNNMoney October 18, 2012: 10:30 AM ET
CEOs Lloyd Blankfein of Goldman Sachs, Jamie Dimon of JPMorgan Chase and Brian Moynihan of Bank of America urge Washington leaders to avoid the fiscal cliff.
NEW YORK (CNNMoney) — Several big Wall Street bank CEOs on Thursday urged Congress and President Obama to avoid the “fiscal cliff.”
In an urgent letter dated Oct. 18, the Financial Services Forum pressed leaders to “reach a bipartisan deal to avoid” massive tax hikes and across-the-board program cuts that could lead to recession. If Congress doesn’t act by Jan. 1, the United States will go over the fiscal cliff, triggering about $1.2 trillion worth of spending cuts over a decade.
“The consequences of inaction — for stability in global financial markets, for economic growth, for millions of Americans still without work, and for the financial circumstances of American businesses and households — would be very grave,” wrote 16 CEOs who are members of the financial industry trade group.
Business leaders, including those from the Business Roundtable and U.S. Chamber of Commerce have sharpened their call for action over the past few weeks. Last week, JPMorgan Chase (JPM, Fortune 500)’s Jamie Dimon told a forum his bank wasted between $50 million and $100 million last summer as Congress and the White House squabbled over a deal to raise the debt ceiling.
Besides Dimon, signers of the letter included Brian Moynihan of Bank of America (BAC, Fortune 500) and Lloyd Blankfein of Goldman Sachs(GS, Fortune 500). Also signing was Michael Corbat of Citigroup (C,Fortune 500), who was named the bank’s CEO just two days earlier.
The financial leaders warned in the letter that the nation’s sputtering economy can’t withstand the “impact of more gridlock from Washington.”
“The solvency, productive capacity, and stability of the United States, as well as its moral authority as a global leader, require that its fiscal challenges be credibly met,” the group wrote. “We trust that you will do everything you can to deliver the necessary leadership at this crucial time.”
If the fiscal cliff isn’t averted, it will lead to job losses in the private sector, which could push unemployment above 9% by the end of 2013, according to the Congressional Budget Office. And one study has suggested some 277,000 federal workers would be laid off.”