Aaron Miller is a member of the Junior State of America (JSA), a student-run political awareness organization for high school students.
Congress' debate continues to intensify over the fiscal cliff, a combination of budgetary issues that hold influence over future federal spending and economic growth. As the presidential election approaches and political gridlock persists, progress on the issue lacks; however, Congress fails to realize that the time to resolve the fiscal cliff is now.
Six hundred and six billion dollars in tax increases and spending cuts are scheduled to take effect at the beginning of 2013, including the expiration of the Bush-era tax cuts and fiscal stimulus measures as well as spending cuts on government investment and entitlement programs. Although these cuts would significantly reduce the national deficit, they would potentially revert America into a recession. BW analysts predict that should the U.S. 'fall off' the fiscal cliff, its economy would contract. Unemployment would simultaneously reach 9.1 percent, and decreased consumption would trigger Federal Reserve bond buying, suppressing the 10-year bond yield below 1 percent.
In order to prevent this economic relapse, congressional officials must reach an agreement to cancel a portion of the planned cuts to the deficit. However, Democrats and Republicans dispute the most socially just and economically effective avoidance of the cliff -- respectively, through either maintaining tax increases or spending cuts. Yet, this change in policy is insignificant, relative to Congress' pressing need to compromise soon.
An inability to reach a deal within the coming months would weigh heavily on economic growth. December, the month most likely for agreement and the peak of the holiday season, boasts the highest discretionary spending in the U.S., but Congress' bickering over the economy would deplete consumer confidence. Furthermore, the Federal Reserve's stress tests in November or December would yield ominous results for America's economic outlook, leading investors to sell-off.
As reflected by the near disaster over last summer's debt-ceiling crisis, failure to compromise shortly would destabilize economic conditions and generate greater skepticism about Congress. When congressional officials just met their midnight deadline in 2011, the stock market weakened, as the S&P 500 fell 10.6 percent and the Dow fell 11.1 percent during this period. Confidence in government concurrently dwindled, and America suffered the loss of its prized AAA credit rating.
Now, just one in 10 Americans approves of Congress' job, tying the lowest rating in 38 years, according to a Gallup poll, even less than the 13 percent approval rating after the debt-ceiling crisis. Congress shows no intention of reversing this trend, evidenced by Senator Patty Murray's statement that Democrats would go over the fiscal cliff unless the GOP were to concede its proposed tax cuts for the wealthiest Americans. This severely partisan and polarized government is not the type of leadership that the American people needs.
The U.S. fought for its independence and established its freedom in order to distance itself from Britain's monarchial values and distinct ruling class. At the moment, Congress contradictorily moves toward this system of governing by disconnecting citizens from the government's operations and by failing to represent their best interests.
In order to prevent further decline, party leaders must climb down from their high horses and recognize the harmful effects of temporizing on the fiscal cliff. Congress must look back to the simple, fundamental functions of government for which it was established: to protect and serve citizens. Therefore, Congress must not be governed by the political gridlock that inhibits headway; rather, it must be governed "by the people, for the people," who want a lasting, bipartisan compromise to avoid the fiscal cliff.