The United States Senate passed legislation early on Tuesday, New Year’s Day, to neutralize across-the-board tax increases and spending cuts that kicked in at midnight.
The pre-dawn vote was heavily one-sided in favor of the legislation with 89 senators voting for and eight against.
The Senate passage set the stage for a final showdown in the House of Representatives, where a vote on the legislation is expected later on Tuesday or Wednesday.
Without legislation, economists in and out of government had warned of a possible new recession and spike in unemployment if the fragile U.S. economy were allowed to fall over the so-called “fiscal cliff” of tax increases and spending cuts.
Shortly after the Senate vote, President Barack Obama said the agreement was the right thing to do and encouraged the House to pass it “without delay.”
Under the deal, taxes would remain steady for the middle class, but increase for individual incomes over $400,000 and incomes over $450,000 for couples.
Spending cuts totaling $24 billion aimed at the Defense Department and domestic programs would be deferred.
In essence, this deal does nothing to fix the economy or America’s debt problem. As one analyst said, it is like a 400-pound diabetic deciding to eat more vegetables, and then ordering meat-lovers pizza with olives—and then not even eating the olives.
Don’t expect politicians to take any meaningful action on the economy until another full-blown crisis hits. And by then, just as it was in 2008, it will be too late.
In the year ahead, look for the U.S. economy to continue to struggle, because no one is willing to face the cause of the crisis.
As President Abraham Lincoln said, “Those nations only are blessed whose God is the Lord.” President Lincoln was quoting Psalm 33:12, and as he indicated, there is a direct link between morality and prosperity.
Without national repentance and a return to God’s law, no amount of voting or legislation will permanently fix the very broken U.S. economy. For a clear perspective on the current U.S. economy, read the article, “‘They Can Print Money.’” ▪