No fix: The cliff dive is for keeps

Paul D. Williams/US Navy

Article Highlights

  • Now that the nation is set to go over the fiscal cliff, the groundwork is being laid to ensure it plays out in slow motion.

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  • The longer federal agencies, small businesses, and taxpayers live on the other side of the cliff, the less urgency will exist to address the only-simmering crisis and the easier it will be to stay there permanently.

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  • There is no reason not to take them at their word.

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Guidance out this week from Defense Secretary Leon Panetta follows an increasingly popular approach in Washington surrounding sequestration: Slow roll its implementation.

Some of this is legitimate given the size and scope of Pentagon contracting, which approaches some $400 billion annually. But plenty of it is pure politics.

Now that the nation is set to go over the fiscal cliff, the groundwork is being laid to ensure it plays out in slow motion. Many policymakers wrongly think that this will buy more time for Congress and the president to work out a deal retroactively later this spring.

In reality, the opposite is true. The longer federal agencies, small businesses, and taxpayers live on the other side of the cliff, the less urgency will exist to address the only-simmering crisis and the easier it will be to stay there permanently.

No pink slip notices by defense manufacturing companies as required by the WARN Act? No problem. This just makes politicians less aware of and less liable for the very real impact sequestration is already having across small and large businesses throughout America.

No government furloughs happening anytime soon? All the more reason to assume living in a post-cliff era is just not that bad.

No debt downgrade or negative stock market reaction in early January after no deal is reached? That will surely help solidify the perception that going off the fiscal cliff and staying put is devoid of long-term consequences for America’s economy or the politicians who let it happen.

For months, many politicians have been clearly stating that they are comfortable going over the cliff and living with a recession and other consequences that are expected to occur as a result.

There is no reason not to take them at their word. And this would include erasing hopes that a deal which couldn’t be reached over the past 18 months will magically emerge in March or April, after many policymakers have become comfortable with the cliff jump.

Mackenzie Eaglen is a resident fellow at the Marilyn Ware Center for Security Studies.

 

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