U.S. Senator Chris Coons (D-Del.), a member of the Senate Budget Committee, has published a white paper on the "fiscal cliff" to provide Delawareans with a more thorough explanation of the difficult economic choices facing our nation in the coming months. The four-page document will be emailed on Wednesday to constituents who have signed up to receive emails from the Senator's office and is available now on the Senator's website at http://coons.senate.gov/fiscalcliff.
"Over the coming months, Congress will confront what some have called the "fiscal cliff' -- more than $500 billion in automatic spending cuts, tax increases and other fiscal changes, all scheduled to take place at the beginning of next year," Senator Coons writes. "Depending on the choices made, some of the impacts of these decisions could be felt right away, while others will be spread out over the next 10 years. Though a more apt description might be a "fiscal slope' rather than a "fiscal cliff,' it doesn't change the fact that serious economic decisions will be made in the weeks and months ahead, and how we handle these choices will have real impact on our nation's debt, deficits and economy."
The paper looks at the four major elements of the so-called "fiscal cliff" -- the expiration of the Bush-era tax cuts, the expiration of the payroll tax cut and a series of other tax measures, the impact of cuts mandated by the sequester, and the approaching decision on the nation's debt ceiling. If all of the tax elements of the cliff kick in, the median Delaware household would see an average federal tax increase of just over $2,000 next year.
The Senator also explains how the fiscal cliff debate connects to efforts to reduce our federal deficit and stabilize our national debt.
"Congress should get a big, bipartisan deal to avert the very significant impacts of the fiscal cliff and reduce our deficit done now, and shouldn't wait until next year," Senator Coons writes. "It seems like an easy choice to simply avert the cliff and kick the can down the road again, but the reality is that our country will need to make an array of tough decisions about our competing economic priorities over the next few months -- priorities like keeping taxes low, investing in critical services, reducing our unsustainable annual deficits, and stabilizing our debt. There is just no easy way out of this situation."