October 22, 2012
Even though Congress is in recess until after the November elections, efforts to find a solution to the so-called “fiscal cliff” continue among members of the Senate. A bipartisan effort aimed at avoiding scheduled increases in taxes and automatic, across-the-board spending cuts early next year are taking shape in Senate, with attention focused on replacing the fiscal cliff with an alternative deficit reduction package in the lame-duck session this December. The efforts are focused on establishing a framework for deficit reduction that would replace the scheduled cuts, or sequester, and tax increases before the end of this year and then require the next Congress to come up with alternative spending cuts and revenue increases to tame the deficit in 2013. This effort is led by Senators Lamar Alexander (R-TN) and Michael Bennet (D-CO).
Despite this and other discussions currently underway, Congress is far from agreement on a deal to prevent sequestration from taking place in January. President Obama reiterated his pledge last week that he would veto any legislation that would allow tax cuts to continue for the wealthiest Americans, while House Republicans have already backed extending all tax cuts through 2013 and support cuts in entitlement spending to avert the sequester. It is still too early to tell what the final outcome might be, but it does seem like everyone at least agrees that the sequester would be bad for the economy and should be avoided. I just worry that the alternative will be just as challenging for research universities.