Former U.S. Comptroller General David Walker said he doubts the White House and Congress will agree by the end of this year to head off across-the-board spending cuts and tax increases set for January.
Congressional committees haven’t “done their work” on realistic plans to overhaul taxes and entitlement programs such as Medicare, and President Barack Obama’s administration has done little to prepare the public for spending cuts and tax increases, Walker said at a luncheon Monday in New York sponsored by the Economic Club of New York and Bloomberg News.
“Realistically, the tough decisions are not going to be made until 2013,” he said. “The American people haven’t been engaged adequately.”
Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.
Congressional leaders have said they probably will wait until after the Nov. 6 election to address the George W. Bush-era tax cuts set to expire Dec. 31 and $1.2 trillion in automatic spending cuts set to begin taking effect in January.
There is no sign of an agreement to avoid the so-called fiscal cliff. The Congressional Budget Office has said the economy will probably tip into recession if Congress doesn’t resolve the impasse by early next year.
Walker said he’s skeptical there will be movement toward a resolution at the end of this year when Congress meets after the election.
“There’s a reason it’s called a lame-duck session,” Walker said. “They’re going to delay the implementation of that from nine months to a year with a plan to do a grand bargain” including budget controls and a tax overhaul, he said.
Budget Control Act
The Obama administration plans this week to send Congress a report spelling out how it would carry out billions of dollars in automatic spending cuts starting in January. Congress agreed to the spending cuts as part of last year’s Budget Control Act in an attempt to require lawmakers to work out an agreement this year to replace it.
The cuts would amount to $109 billion next year, coming equally out of defense and non-defense spending. Democrats are insisting that Republicans accept some tax increases in exchange for altering the defense cuts, while Republicans have refused.
Walker served as U.S. comptroller general from 1998 to 2008 under Democratic President Bill Clinton and Republican President George W. Bush. Now he leads the Comeback America Initiative, an independent, non-profit fiscal policy organization.
Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.
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