Happy New (Year) Continuing Crises and Resolutions

Welcome to the New Year! And a new blog.

After much drama, the well- hyped fiscal cliff is now avoided (postponed, delayed, played for all its worth ). The mini drama about the Speaker of the House vote is also resolved with Speaker Boehner winning a squeakily narrow re-election bid, beating --- well, no one. What a thrilling way to end and begin a year.

If you enjoyed this political Kabuki theater of the absurd, don't worry, there are many more chapters to be played out this year with continuing crises and resolutions for all. If you are concerned about the state of the nation and seeking serious solutions, I suggest alcohol,  humor and venting. I'll offer a little of  the latter two.

What did happen with the fiscal cliff ?  Well, it's a two part cliff - spending and taxation.

The spending half (sequestration) got postponed for 2 months with no clear path to a compromise. So we can look forward dealing with it and  raising the Debt Ceiling at the same time. Another predictable fearful crisis looms !

The taxation half got resolved by making permanent all the demonically unaffordable "Bush Tax Cuts" for all but those few taxpayers making over $400,000 (or $450,000 for a couple); thus saving the middle class while making the rich pay more - or maybe not. The resolution ended the payroll tax "holiday"; so workers will see their paychecks hit with an extra 2% tax.  There are more details, but those are the highlights. What's the bottom line? The government collects about $600 Billion over ten years - or about $60 Billion per year in new tax revenue. That will be a great help in reducing our over $1 Trillion per year deficits and over $16 Trillion in Debt.

By the way, that taxation cliff bill included several multi-billion dollar spending increases for various special interests, like more windmill subsidies. Maybe those will be addressed later at our scheduled spending crisis in two months. Or maybe not, since only the sequestration spending is formally on the table.

You remember the Sequestration Breakthrough of 2011?  The President and Congress couldn't decide whether or how to cut spending or increase taxes before hitting the Debt Ceiling, failing to pay our national debts, and going "bankrupt". That crisis was resolved by the Government giving itself the rest of the year to figure out how to get new funds and cut spending or, failing that, automatically "sequestering" or cutting the needed funds equally from Defense and other Domestic sources. Well, nothing got fixed in 2011or 2012, so we were due to cut those sequestered funds on 1 January 2013.

Nobody wanted to do that, so we had the great fiscal cliff drama that just ended by further postponement. Now we have the new 2013 Fiscal Cliff  Do-Over in two months coinciding with a new Debt Ceiling crisis. Deja vu anyone ?

Of course, the really big fiscal driver ( Entitlements - Social Security, Medicare, and Medicaid) are not really on the table for negotiations yet; nor, it seems, is the Federal Budget. The Senate has not passed a budget in 3 years and isn't likely to this year which means we will have renewed House - Senate negotiations over a 2014 Continuing Resolution to fund the government past 1 October 2013.

Happy New Year!  Looking forward to continuing crises and another Continuing Resolution.