Tracing the Origins of the “Fiscal Cliff”
Shortly after the re-election of President Barack Obama, there was an immediate and pressing concern to address the termination of tax cuts by January 1, 2013.
The expiration of several tax cuts worth billions of dollars—the Bush tax cuts, the payroll-tax holiday, the alternative minimum tax, and tax credits—would result in raised expenses across the board, from the middle class to the affluent “one-percent.” The phrase used to define this impending economic crisis is known as the “fiscal cliff.”
It is safe to say that the “fiscal cliff” is the latest catchphrase frequenting discussion of American politics this year after “Invisible Obama,” “the forty-seven percent,” or “binders full of women.” The origins of the last three phrases can be easily tracked down, but where exactly does “fiscal cliff” come from?
Most news outlets are quick to trace the phrase’s origins to a speech given by Chairman of the Federal Reserve Ben Bernanke in this past February when forecasting the drastic economic shift, which is only five weeks (or merely thirty-six days) away as of Monday November 26th.
However, a BBC News article traces the term’s origins back to 1957 when New York Times journalist Walter Stern used “fiscal cliff” in an article discussing first-time homebuyers:
To the prospective home owner wondering whether the purchase of a given house will push him over the fiscal cliff, probably the most difficult item to estimate is his future property tax.
The article also credits Republican Sen. Jim DeMint of South Carolina to saying the phrase in 2008 discussing President Obama’s spending program, who suggests that the country could have some benefits by jumping off the immense financial precipice.
Negotiations between Democrats and Republicans are slowly progressing, but the ideological differences that set them apart continue to persist, therefore barraging the conclusions of important decisions like the fiscal cliff. While Democrats want the Bush tax cuts to expire, the Republicans want them extended. Furthermore, Republicans want to maintain current tax rates, but reduce government spending.
The Wall Street Journal reports that President Obama and House Speaker John Boehner spoke over the phone to discuss the fiscal cliff Monday November 26th. The President and Senator Boehner are considered to be the leaders of the negotiations between Democrats and Republicans in finding a solution to avert the fiscal cliff, but visible progress has yet to be seen.