On the calendar, Congress and President Barack Obama still have three weeks till Christmas to reach agreement on 2013 tax and spending measures.
However, the rest of the nation — and markets around the world — already are acting on what they fear might or might not happen. In fact, we are already heading down the fiscal cliff because of uncertainty about future government policy. Ignoring market fundamentals, businesses, investors and individual Americans are acting to protect themselves from a government that has yet to demonstrate that it can make tough, good decisions for the best interests of the country.
As reported in Sunday’s Billings Gazette, local business people are seeing this “pre-cliff” effect. Clients are being advised to close deals before Dec. 31 because tax rates for 2013 are unknown and probably won’t be better next year.
The turbulence could worsen before year’s end if lawmakers and the White House don’t reach a deal soon, said a Billings financial adviser.
Some investors are opting to take capital gains this year with the expectation that their tax rates will be higher next year, one stock broker reported.
The advice to investors is: “Be careful.”
Interviewed Tuesday in NBC’s Today Show, Warren Buffet told Matt Lauer that the fiscal cliff is “manmade and can be man corrected.”
The Berkshire Hathaway chief noted that his company is investing $9 billion in plant and equipment in 2012 — more than any other year.
“I’m confident about the American economy over the decades to come, and we’ll have ups and downs and I can’t really predict them, but one thing I’m sure of is America is a winner.”
Members of Congress need to take a cue from Buffet: Show confidence in America. Do the job Americans elected you to do. Compromise on the automatic tax hikes and across-the-board spending cuts. Set a smarter course for growing the economy and delivering public services. Start restoring Americans’ confidence that their government can govern.
Sportsmen’s bill shot down
Under the category of things that don’t inspire confidence, we find a nearly party-line vote taken Monday in the U.S. Senate to block the Sportsmen’s Act. (Sen. Barbara Boxer, D-Calif., was the only Democrat to join Republicans in voting against this bill.) This bipartisan bill brings together 19 proposals from Republicans and Democrats to improve hunting and fishing access, to protect hunter and angler rights and conserve valuable recreational lands and wildlife. Dozens of organizations from across the political spectrum support this bill, which was introduced by Montana’s Sen. Jon Tester, who voiced his disappointment, saying: “This bill will create jobs and strengthen our small businesses, and I will continue pressing to get it through the Senate on behalf of every sportsman and woman around the country.”
According to Tester, chairman of the Congressional Sportsmen’s Caucus, his legislation would reduce the deficit by $5 million. According to Sen. Jeff Sessions, R-Ala., the bill is bad because it spends money on conservation. Never mind its small net deficit reduction.
If the Senate was functioning properly, Sessions, Boxer, Tester and their colleagues would debate this legislation, compromise where needed and vote on its merits. Sadly, the Sportsmen’s Act appears to be another case of Congress missing the mark.