There are two facts you should know about the “fiscal cliff” deal:
One, it won’t reduce the deficit by much.
Two, it won’t avert the fiscal cliff.
Whatever deal gets worked out this week will be very narrow in scope, simply delaying major parts of the fiscal cliff and doing little to reduce the deficit. You could have predicted this would happen from the moment that the “grand bargain” negotiations between President Obama and House Speaker John Boehner broke down: Since then, the big, numerical targets for deficit reduction have disappeared from the public debate, which has shifted to focusing almost exclusively on the individual components of a small, short-term fix in the name of averting an immediate austerity crisis.
The short-term deal addresses just the tax components of the cliff, and the concern about raising revenue for long-term deficit reduction has been sidelined by the growing urgency for a short-term patch, the Republican desire to keep the Bush tax cuts (many or most of which will be extended) , and the Democratic commitment to including some stimulus in the deal (the $30 billion extension of unemployment insurance that will likely be in it). The sequester would simply be delayed for a few months. And there will be little if any deficit reduction in the package.
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