US Politics Feature: Explaining the Next Fiscal Crisis...Coming To You in 6 Weeks

(Cartoon: Monte Wolverton)

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After the recent drama and supposed escape from the "fiscal cliff", two developing stories in Washington will affect the global economy. The first is whether Congress can pass measures to address three additional fiscal dilemmas, all of which need to be resolved by the end of March. The second, a vital sub-plot in the larger play, is the intentions and aims of the Republican-controlled House of Representatives.

Near the end of February, the US Treasury will have exhausted all contingency measures to avoid breaching the debt limit, currently $16.4 trillion, and the US will immediately default on 40% of its fiscal obligations. America could still afford to pay foreign debts through its continual receipts of tax revenues. It could even fund Social Security and other low-income payment programs...provided it is willing to make cuts such as the closure of the FBI.

As the talks on raising the debt limit reach the status of Urgent, Congress will also have to address the "sequestration cuts", delayed for two months by the fiscal cliff deal.

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US Politics Opinion: Good Riddance to the 112th Congress...But Will the 113th Be Any Better?

Democracy Now! looks at the 113th Congress: "The Most Diverse in History, But Not the Most Progressive"

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The 112th Congress has failed singularly to serve the nation's interests. Republicans in the House have refused to consider almost every Presidential initiative, and the Democrats have refused to talk with their opposite numbers in any meaningful way. Instead, both sides involve themselves in “yahboo” politics.

It has to be said that the current crop of supposed leaders are not fit for purpose. Will change occur? I wouldn’t wager even a wooden nickel on it --- instead, I'll put two real nickels on more Congressional business as usual and another political crisis at the end of February.

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US Politics Audio: A Good Deal on the "Fiscal Cliff? --- Scott Lucas on a BBC Panel

I joined a panel on the BBC World Service's Have Your Say tonight to discuss the economic and social issues around the package, approved by Congress last night after days of to-the-wire negotiations, to avert a "fiscal cliff". 

I found this one of the most useful discussions, albeit one which was generally pessimistic about the outcomes of the agreement. No one was fighting a political corner, so the chat could ask "What issues are not being addressed by the deal?" That allowed topics such as health care, education, and income inequality to be introduced alongside the headline topics of taxes and Government spending.

Other panellists are Tiziana Dearing, the CEO of Boston Rising, a "nonprofit organization committed to ending the cycle of poverty in Boston; Robertson Williams of the Tax Policy Center; and Robin Murray, a retired family doctor from Florida.

The discussion starts at the 11:25 mark and lasts for about 25 minutes, before and after the news.

US Audio Feature: So How Serious is This "Fiscal Cliff"? --- Scott Lucas with the BBC

See also US Politics Special: A 6-Point Guide to the "Fiscal Cliff"

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Complementing Lee Haddigan's six-point guide to the "fiscal cliff" --- in which taxes will increase and funding for some programmes will be in jeopardy if there is no political agreement by midnight --- I spoke with the BBC this morning to explain the issues and their significance.

The take-away line: "The US will not go into economic meltdown if the White House and Congress fail to reach a deal. The effect is psychological --- it is loss of confidence that could foster another recession."

nd will there be a deal? "We won't know until midnight tonight because this is a game of political chicken."

BBC Radio 5 Live: The discussion starts at the 6:08 mark.

BBC Radio Scotland: The item begins at 2:07.26.

BBC Radio Wales: The interview starts at 1:25.34.

US Politics Special: A 6-Point Guide to the "Fiscal Cliff"

President Obama calls on Friday for a resolution to avoid the "fiscal cliff"

See also US Audio Feature: So How Serious is This "Fiscal Cliff"? --- Scott Lucas with the BBC

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Editor's Note: As 2012 comes to a close, the emergency story in the US press is the "fiscal cliff". If there is no agreement by midnight, then tax cuts introduced by George W. Bush almost a decade ago will lapse, and funding of Federal programmes --- such as benefits for long-term unemployment and farm subsidies --- will be in jeopardy.

Discussions on Sunday were adjourned without agreement between the Obama Administration and Democratic and Republican leaders in Congress, despite Democratic concessions such as the raising of tax rates only on those making more than $450,000 a year and on an escalation of estate tax.

But as the haggling over details continues to the last minute, what are the basic economic issues? What happens if the clock strikes 12 and there is no dramatic resolution? EA's Lee Haddigan explains....

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US Politics Analysis: Trotsky's Icepick and the Fight within the Republican Party

House Speaker John Boehner speaks on Wednesday about the "fiscal cliff" negotiations

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The murder of Leon Trotsky at Stalin's behest in Mexico in 1940 --- with an icepick that made his ears burn --- has become synonymous with the tendency of supporters of the same political ideology to act more as enemies than friends. The history of Communist movements worldwide, and in the US, is rife with infighting and intrigue, splits and divisions.

Trotsky's Icepick has now reached the conservative movement in the US. The immediate sign is the division over how Republicans should approach the "fiscal cliff" negotiations, but there are also internal recriminations about how and why Mitt Romney managed to lose a winnable Presidential election.

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US Politics Analysis: Explaining the Fiscal Cliff and the Battle Over the "Taxpayer Protection Pledge"

Republicans are aware that President Obama has momentum on his side for increased tax revenues during the fiscal cliff discussions, but they believe that history and principle are on theirs. Will some of them break the Pledge to ensure that a compromise is reached? That has far more to do with if and how Democrats assure them over spending cuts than it does with media stories about their loyalty to one Grover Norquist.

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US Politics Analysis: Pushing Obama and Congress Towards the "Fiscal Cliff"

Federal Reserve Chairman Ben Bernanke talks on Tuesday about the "fiscal cliff"

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America's politicians are wrestling with a basic problem --- raise taxes or cut welfare spending --- and the interested and influential advocacy groups are unlikely to be accommodating. Thought organisations supporting Obama are shouting loudest now there is little doubt that, once Republicans have come to terms with their electoral defeat, conservatives will push back hard. This is a game which is only beginning and in which the President and members of Congress are far from the only players.

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