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Our Opinion: ‘Cliff’ averted, but additional perils loom

News Tribune editorial

The deal to avert the so-called “fiscal cliff” is being greeted with much dissatisfaction.

The new year brought congressional approval of legislation to stave off tax hikes for the middle class and to raise tax rates for specified annual income thresholds — $400,000 for individuals and $450,000 for married couples.

But lawmakers, economists and observers criticized the bill’s narrow scope. They contend the deal — like a previous agreement that created the fiscal cliff — simply kicks the economic enigma down the governmental corridor.

A sampling of comments includes:

• “Regardless of a deal getting done, people on Wall Street are not going to run around giving high fives” in celebration. “The federal government is obviously dysfunctional, to say the least.” — Ben Schwartz, chief market strategist for Lightspeed Financial.

• “Nothing really has been fixed. There are much bigger philosophical issues that we aren’t even addressing yet.” — Joseph LaVorgna, an economist at Deutsche Bank.

• “The speaker the day after the election said we would give on taxes and we have. But we wanted spending cuts. This bill has spending increases. Are you kidding me? So we get tax increases and spending increases? Come on.” — U.S. Rep John Campbell, R-Calif.

• “There’s more work to do to reduce our deficits, and I’m willing to do it.” — President Barack Obama.

The proverbial kicked can will reappear as early as February, when Congress will need to raise the $16.4 trillion federal borrowing limit.

The prospect already has prompted Obama to warn Republicans “if Congress refuses to give the United States government the ability to pay these bills on time, the consequences for the entire global economy would be catastrophic, far worse than the impact of a fiscal cliff.”

The deja-vu quality of government again avoiding political pitfalls by postponing effective action comes as no surprise.

Remember, we re-elected many of the same people who created the fiscal cliff.

As a nation, we re-elected the president and, in Missouri, we re-elected a U.S. senator and eight U.S. representatives.

A variation of the definition of insanity might be expecting a different outcome when we elect the same people to grapple with the same dilemma.

The cliff may have been averted but — as the president warned — a potential catastrophe looms next month.

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