Time to Work on the Fiscal Cliff
Posted at 9:45 a.m. on Nov. 7, 2012
Hanging over Election Day was always the knowledge that once the results were in and the victors known, there would be less than two months for lawmakers to address the year-end “fiscal cliff.” It is clear that President Obama has won reelection and will have to find ways to work with a Republican-controlled House of Representatives and a slim Democratic majority in the Senate, and the Financial Times looks at how the “fiscal cliff” debate might now play out with this political balance.
“This combination was always seen as potentially the most dangerous – particularly if both Mr Obama and Republicans, who retained control of the House of Representatives, claim a mandate from voters to stick to the tough positions on taxes and spending that led to the current paralysis. But it also offers a fresh opportunity for Mr Obama and John Boehner, the Republican House speaker, to rekindle talks on a broad deficit reduction agreement that were abandoned in acrimony in July of last year.”
“Mr Obama’s re-election assures that the ‘fiscal cliff’ can be tackled almost immediately. If Mr Romney had won, the assumption was always that there could be a short-term extension of current policies which would have punted the big decisions and negotiations into sometime next year… However, more significantly, there is hope that both Republicans and Democrats will feel pressure to make divided government work this time around in a way that it failed to during the past two years, amid low approval ratings from voters and intensified engagement from business groups looking for more certainty on fiscal policy.”