New Hersey State of Muncicipalities Facebook Twitter  Linkedin with NJSLOM NJSLOM YouTube Channel NJLM Blog       





   
FROM 222 WEST STATE STREET
Bill Dressel, League Executive Director

 

POLITICAL COURAGE
AND THE FISCAL CLIFF

Bill Dressel

On October 31, 2012, Governor Christie welcomed President Obama to New Jersey to survey the damage wrecked by Hurricane Sandy. The public good united two political adversaries. At a time of crisis, partnership replaced partisanship.

“I have to say,” said the President, “that Governor Christie throughout this process has been responsive; he has been aggressive in making sure that the state got out in front of this incredible storm. And I think the people of New Jersey recognize that he has put his heart and soul into making sure that the people of New Jersey bounce back even stronger than before. So I just want to thank him for his extraordinary leadership and partnership."

Before January 1, 2013, as the Federal Budget speeds towards the “fiscal cliff,” we need to see more of the same.

In 2010, the President signed the Tax Relief, Unemployment Insurance Reauthorization and Jobs Creation Act. It protected an estimated 100 million middle class families, by extending the“Bush era” tax cuts, and by changing the threshold for the Alternative Minimum Tax. It reduced FICA payroll tax rates for one year and extended federal unemployment benefits for 13 months. It extended a Small Business Tax Credit and business depreciation deductions. And it provided relief for working parents and for students and their families.

In the summer of 2011, approaching federal debt limits, the Administration and Congress agreed to a plan to allow the government to continue to operate, and to significantly reduce the federal deficit over the next 10 years. The agreement called for mandatory cuts (sequestrations), beginning in 2013, if Congress failed to enact a 10 year $1.2 trillion deficit deduction bill. Except for military employee pay, and Social Security, Veterans’ and Medicaid benefits, absent further Congressional action, the mandatory cuts will apply to both military and domestic spending.

If nothing is done in Washington, the combination of higher taxes and reduced federal spending would push the U.S. over, what has been referred to as, the “fiscal cliff.” While the deficit would be drastically reduced, economic activity would be significantly slowed. Conversely, extensions of the tax cuts and relaxation of the sequestration requirements would balloon the federal deficit and increase the national debt.

Only the courage to compromise on both sides of the aisle can avert the coming crisis—for the good of the country and the future of our children. We hope our representatives in Washington can quickly put the strident partisanship of the bitter national campaign behind them. We hope the New Jersey delegation will lead the way.

 

Editorial from New Jersey Municipalities, Volume 89, Number 9, December 2012

Privacy Statement | NJLM FAQ
New Jersey State League of Municipalities • 222 West State Street • Trenton, NJ 08608 • (609) 695-3481
  FAX: (609) 695-0151