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A 'fiscal cliff,' a 'fiscal slope' or ... let the readers decide

November 16, 2012|By Jon Healey
  • Will Congress emulate famed Oakland Raiders punter Ray Guy in its approach to the "fiscal cliff"?
Will Congress emulate famed Oakland Raiders punter Ray Guy in its approach… (Associated Press )

As someone who writes about the economy and the federal budget, I've been forced to use the phrase "fiscal cliff" repeatedly in recent months. Chances are better than good that I'll use it many more times in the coming weeks, as President Obama and congressional leaders try to avoid...

And here is where I run into a metaphorical wall. What happens if you don't avoid a cliff? You go over it, plummeting into the abyss. Or the ravine. Or the valley below. Whatever. It's a very binary thing: Either you avert disaster, or you don't.

The problem policymakers in Washington face is real and potentially catastrophic, but it isn't so binary. We need a better metaphor.

"Fiscal cliff" refers to the simultaneous expiration of numerous temporary tax breaks -- including the lower rates enacted during President George W. Bush's first term and the 2-percentage-point cut in payroll taxes Congress put in place two years ago -- and an assortment of spending cuts,  including across-the-board reductions in defense and social programs as well as the end of extended unemployment benefits. Economists at the Congressional Budget Office warn that allowing all of these changes to go into effect would send the economy back into a recession, although the changes also would do a bang-up job of reducing the federal deficit.

Conservatives have embraced the imagery because it fits with their argument that tax increases will choke off the recovery, which is weak enough as it is. Liberals aren't so troubled by the idea of the Bush-era tax cuts expiring; if the rates returned to their pre-2001 levels, Democrats could then push for tax cuts for just the lower and middle brackets without having to persuade Republicans to violate that pesky Grover Norquist pledge. Nevertheless, the left argues that slashing federal spending will choke off the recovery. So Democrats have started using phrases such as the "fiscal slope" to describe the looming problem.

I think the "slope" imagery is insufficiently threatening. The CBO projects that the economy would shrink significantly in the first half of the year before rebounding anemically in the second half. Such a setback would cause unemployment to spike, pushing more than a million more workers out of their jobs. Considering how slowly the economy has been growing, the last thing the country needs is to shrink payrolls.

On the other hand, the tax hikes and spending cuts amount to a "cliff" only if Congress does absolutely nothing about them. As poorly as lawmakers have performed in recent years, they're not that irresponsible. (I look forward to the many comments from readers taking issue with me on this point.)

Even if they do, the full impact of the changes won't be felt immediately (except by the unemployed, whose federal benefits will be cut off). Paychecks will shrink a bit because more taxes will be withheld, and the spending cuts will be spread over the remaining nine months of the fiscal year. It'll feel less like plummeting to a fiery end than death by 1,000 cuts.

The most likely scenario is that most or all of the cuts will be postponed, and most or all of the tax breaks will be extended. In short, Congress will punt. And one cannot punt over a cliff, unless you're Ray Guy. Besides, Congress wouldn't be avoiding the fiscal ramifications forever; it would simply be postponing the effective date.

It's also possible that Congress will push back a portion of the cuts and allow some of the tax breaks to lapse, such as the payroll tax holiday, while it works out a so-called grand bargain on the budget. Such a move would deliver a significantly softer blow to the economy than the full slate of cuts and hikes.

Yes, it's possible that Congress and the administration will take the cuts and breaks completely off the table by agreeing to an economic plan that brings the deficit under control while also stimulating economic growth, rather than stifling it. But that's precious close to magical thinking.

Readers, here's where you come in. What's the right phrase to describe the problem that policymakers are facing? Is it a Mjolnir-like hammer suspended over the economy? Is it a "fiscal fast," a phrase coined by Derek Thompson at the Atlantic to convey an economy robbed of nutrients? A "fiscal plastic bag over the head," a phrase I just coined to make fun of Thompson? An "austerity bomb," the description Brian Beutler of Talking Points Memo used after the CBO issued its first warning?

Come up with your own imagery, or endorse someone else's particularly apt metaphor. Whoever submits the best original suggestion will find their phrase incorporated by me into many an Opinion L.A. blog post in the coming weeks -- with all due credit given to the author, because that's how we like to do things here.


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Follow Jon Healey on Twitter @jcahealey

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