Today the lame duck session of congress begins. This lame duck is somewhat more important than most. This lame duck has to do something about the so called fiscal cliff. What is the fiscal cliff? I could go into a lot of details here, but let’s summarize right off the bat. The fiscal cliff is what happens at the beginning of 2013 where taxes go up (back to pre-Bush levels) and spending is drastically cut across the board. So what happens if this lame duck congress does nothing? That depends on who you talk to.
The markets have been on edge ever since the election. Not really because of who was elected, but because the fiscal cliff is a real concern for them. Everyone in Wall Street is very concerned about the fiscal cliff because they say that going over it would spell doom and gloom for the economy. Business leaders across the country are jockeying to have their input and voices heard as the White House and congress work towards an overall solution to the impending fiscal cliff.
The question is will the President be able to lead the country towards a solution? Even if President Obama is able to lead, will the ultra conservatives, who still have a large voice in the republican controlled house, could scuttle any deal they feel isn’t in their best interest. If that happens, we may very well go over the cliff.
What do I think will happen? I think there will likely be a short term deal that keeps everything the same through 2013 and brings us right back to this very situation next year, though without a lame duck congress making the moves. Sad but true, congress is known for kicking the can down the road instead of acting. I could see the situation arise where we go over the cliff. In fact I have heard rumblings from both sides suggesting that wouldn’t be the worst thing in the world. Going over the cliff would make for a very bad 2013, but it could mean we finally get out of the slump and start to really grow starting in 2014 and beyond.
One thing is certain. Even though the election is over, things are just starting to get exciting in Washington!