The U.S. Debt and Deficit Crisis, Lame Ducks, and a New Responsibility
By Fr. Fred Kammer, SJ
Now that the election is over, a lame duck Congress has returned to Washington and a “new Congress” convenes in January. Facing both is the so-called “fiscal cliff” of automatic budget cuts (sequestration) and the termination of the Bush tax cuts created by the failure of the so-called Congressional Super-Committee to reach a bi-partisan agreement last year on tax income, budget cuts, the deficit, and our ever-increasing national debt, now at $16 trillion (as of October 2012).
If Congress does nothing to change the current law, the Congressional Budget Office (CBO) indicates that in January the following changes will occur and have the largest cumulative impact on the budget and the economy:
- A host of significant provisions of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Public Law 111-312) are set to expire, including provisions that extended reductions in tax rates and expansions of tax credits and deductions originally enacted in 2001, 2003, or 2009. (Provisions designed to limit the reach of the alternative minimum tax, or AMT, expired on December 31, 2011.)
- Sharp reductions in Medicare’s payment rates for physicians’ services are scheduled to take effect.
- Automatic enforcement procedures established by the Budget Control Act of 2011 (P.L. 112-25) to restrain discretionary and mandatory spending are set to go into effect.
- Extensions of emergency unemployment benefits and a reduction of 2 percentage points in the payroll tax for Social Security are scheduled to expire.