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Gussing the Fiscal Cliff's Fate - Article Example
Finance & Accounting
Pages 3 (753 words)
Guessing the Fiscal Cliff's Fate Name: Institution: Guessing the Fiscal Cliff's Fate The United States fiscal cliff was the anticipated slowing of government spending coupled with an increase in tax rates that was to happen through the January 2013 sequestration of earlier ratified laws…
As stated by the then presidential candidates, the White House, Federal Reserve Chairman and Congress Members, the event of going over the cliff would have been destructive and irresponsible. This paper will give a brief of the guessing of the fate of the fiscal cliff. The guessing of the fiscal cliff’s fate was centered on who between the two presidential candidates would make it to the Office. Questions were rife whether the Congress would push the financial system over the economic cliff. The functionality of Washington was questioned in light of speculation that the president to be elected, and the Congress would allow taxes to shoot up and government spending to be reduced, all with the risk of a renewed recession. It will be remembered that, in August 2011, it was agreed between President Obama and the Congress that annual federal spending would be reduced by $900 billion spread over a 10 year period (Wall, 2012). That was approximately a 33 percent cut of the total federal budget. In a bid to accomplish more, President Obama signed into law a bill passed by the Congress that required spending cuts in all sectors from 31st December 2012. That was unless an agreement was reached on an amalgamation of tax increases and benefit cuts that would save another $1.2 trillion in 10 years. ...
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