Posts Tagged ‘fiscal cliff’

It is called a fiscal cliff because in addition to the expiration of the Bush tax cuts, the largest contributors to the nation’s deficits over the past 10 years, there are also automatic across-the-board 8.2 percent cuts in federal discretionary spending, including defense, that will go into effect on January 3, 2013.

If congress and the president don’t reach a deal on taxes and spending to reduce the federal debt by $1.2 trillion over the next decade, all these cuts take place automatically. Experts believe that in today’s economy, which is recovering very slowly, “new” taxes coupled with these cuts could bring about another recession.

Federal student loans, most child nutrition programs and the Children’s Health Insurance Program would be exempt from cuts, but there are deep cuts to general educational programs, like $334 million in Department of Education funding for California, plus $75 million less for Head Start and $19 million less in childcare subsidies.

The cuts would not take effect until July 1, 2013, so there is time for congress to work out a solution, even in the event that we “plunge off the fiscal cliff.”

More details are available in this EdSource article.

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Somebody started the term “Fiscal Cliff.” What exactly is the Fiscal Cliff that we’re about to run over?

The Bush tax cuts are expiring. They were meant to be temporary. Time has run out and on January 1, 2013, we’ll go back to the Clinton tax rates.

The tax rates that were in place when the economy boomed unlike at any other time in the last 50 years, the tax rates that were in place when the government produced a surplus and we were paying off our debt so we would not burden our children and grandchildren with it.

Some cliff, I say.

I am shaking in fear of the unimaginable hell, the utter disaster, of this Fiscal Cliff.

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