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: Loathing and More Loathing in Washington DC

A wise man once told me there were two things in this world you do not want to see made: sausages and a political deal.

And so it is with the news that that the legislative and executive branches of the US Government have reached agreement on lifting the US debt ceiling, a step which should have been a formality. We are being treated to congratulatory statements by America’s political leaders of common sense prevailing and of the spirit of compromise.

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US Politics Analysis: Darkness Before An Agreement on the Federal Debt?

With the usual disclaimer that it could all change tomorrow, there is hope that the adults in Washington can get beyond the "weasel" rhetoric and accusations of childishness to hammer out a deal that moderates on both sides can swallow as a necessary evil.

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US Politics Analysis: The Republicans' Damaging Myth of Lower Taxes = More Employment

Last week, President Obama finally showed some of the leadership over the issue that his critics have demanded. But his new engagement with the debt limit talks, and his desire for a long-term deal, have run headlong into the brick wall of the Republican insistence that spending cuts are the only acceptable means for cutting America's deficits. Even though virtually every moderate media observer is demanding some revenue increases as part of any meaningful deal and even though there is reason to doubt tax increases would be as harmful to the economy as conservatives maintain, Republicans seem prepared to hold this position to the point of breakdown.

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US Politics: "Cooling Saucer" or "Tar Pit"? The Filibuster Continues in the Senate

So there will be few dramas on legislation this year. That is, unless a Democratic minority in the Senate –--where some fiscally conservative members could join a united Republican caucus –-- endorses cuts in government spending. And then we start talking reconciliation for finance bills and Presidential vetoes.

But enough speculation; the filibuster remains largely as it was, and along with it the nearly impenetrable rules of the Senate. "Cooling saucer" or "tar pit"? You decide.

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US Politics: Previewing Obama's "State of the Union" (and How the Republicans Will Try to Pre-Empt It)

It promises to be an interesting Tuesday with potential filibuster reform and an outside chance of Republicans forcing a repeal vote on the health care plan. But in the end it will be the power of the Presidency that draws the world's attention to Washington on Tuesday. With one of his most important weapons, President Obama has the chance to remind Americans, and an international audience, of the optimism that surrounded his election in 2008.

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US Politics: Why This "Lame Duck" Congress is So Important

On Monday the Representatives and Senators who were defeated in the elections, or are leaving office for other reasons, will still be members of Congress with full legislative responsibility. So, even though Republicans regained control of the House on 2 November, for a short while Democrats will keep their majority. Those Democrats who are departing in January can attempt to pass controversial (or "radical", according to the November Speaker website) legislation without having the mandate of their electorate.

The issues to watch, in what could be an animated session for a waterbird that can’t walk, are the Bush tax cuts, the appropriation debates, and the seemingly inevitable civil war –-- this time over earmarks –-- that erupts whenever conservatives gain electoral success.

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