The Wisdom in Avoiding the Worst Case in America’s Financial Cliff

Published in Tokushima Shimbun
(Japan) on 25 December 2012
by Editorial (link to originallink to original)
Translated from by Kenny Nagata. Edited by Kathleen Weinberger.
While there has been a period of optimism, dark clouds have begun to gather, as President Obama and opposing Republicans are stuck in a stalemate.

The Republicans gave up on coming to an agreement before Christmas and will resume discussions after the break. During this single week, it is do or die.

If the confrontation persists and a breakdown occurs, there is a fear that the American economy could fall into negative growth next year. This would have a serious impact on the global economy; a hard blow to the Japanese economy would be inevitable. This would no doubt prolong the recession.

They must do everything they can to avoid the worst-case scenario of falling off of the cliff. It will not be easy, but there should be a way. We hope they will be able to utilize their wisdom liberally, concede where they are able to and work stubbornly towards a solution.

The fiscal cliff is composed of the problem of the “Bush tax cuts” from the last administration, which will be expiring at the end of the year. Included are social security tax cuts for workers, combined with the beginning of mandatory budget reductions that are a part of the new year's financial reforms, the implementation of which will result in a sudden tightening of public finance.

The U.S. Congressional Budget Office predicts that if they are unable to avoid the cliff, the 2013 fiscal year will result in a $503 billion cut to the deficit and will strike a serious blow to the American economy.

The focal point in the discussions for the Republicans regarding the tax increase on the wealthy—which will take effect when the large scale tax credits expire—is what level of annual income should be considered wealthy.

Mr. Obama insists that anything over $250,000 should placed in that category, but has compromised to $400,000. Republican Speaker of the House John Boehner, who opposes tax increases, has approved tax increases for those who earn over $1 million. As the deadline approaches, it is natural for both sides to show their willingness to compromise.

However, looking to maintain leadership in the negotiations, Mr. Boehner suddenly proposed that they could consider something less than $1 million. Conservatives within the Republican Party that are opposed to any form of tax increases abandoned any calls for a vote, running that ship aground.

Having received this response, Mr. Obama expressed his thoughts on pushing for an extension on middle income tax reductions and unemployment benefits before the end of the year. The budget expenditures that the Republicans are prioritizing are something that can be postponed to the next year, as an appropriate emergency escape plan. We want to expect more flexibility from the Republicans.

In addition to the pros and cons of cutting public benefits and the size of revenue over the next ten years, there are many other points of contention within the Republican party. Mr. Obama has shown that he wants to make a comprehensive fiscal reform plan in the new year. Whether or not discussions with the opposition will be successful is a matter that will be watched closely.

When the discussions broke off last week, average stock prices fell in both the New York and Tokyo stock exchanges. There is a fear that all of the hard work invested in moving towards a cheap yen with high stock prices will be in vain.

For the Cabinet Office, in the situation where they can’t avoid a breakdown, the decrease of American investment and consumption will push the Japanese real growth rate down to 0.4 percent, and, including the high price of the yen, could dip even further.

There are only six days before they fall off of the cliff. The effect of that would be unfathomable. We hope they don’t forget that the whole world is holding their breath, watching.


米国は、減税の失効と歳出の強制削減が年明けに重なる「財政の崖」を回避できるのだろうか。

一時は楽観的な見方が広がったものの、ここに来てオバマ大統領と野党共和党との協議が行き詰まり、暗雲が漂い始めた。

与野党は目指していたクリスマス前の合意を断念し、休暇明けから協議を再開する。この1週間が正念場だ。

対立が長引き、決裂することになれば、来年の米経済はマイナス成長に陥る恐れがある。世界経済に深刻な影響を与え、日本経済も痛手を受けるのは必至だ。景気後退の長期化も現実味を帯びてくる。

崖から転げ落ちる最悪の事態は何としても避けなければならない。容易ではないが手だてはあるはずだ。双方が知恵を出し合い、譲れるところは譲り、解決へ粘り強く努力を続けてもらいたい。

財政の崖は、前政権から続く「ブッシュ減税」と呼ばれる大型所得税減税や、勤労者向けの社会保障税減税などが今年末で一斉に失効するのに加え、年明けには財政再建に向けて法制化された強制的な歳出削減策が始まり、崖のように急激なペースで財政が引き締まる問題を指す。

米議会予算局は、回避できなければ2013会計年度の財政赤字削減効果が約5030億ドル(約42兆3千億円)に上り、米景気は大きな打撃を受けると予測している。

与野党協議の焦点になっているのは、大型所得税減税の失効に伴う富裕層増税の対象を、どれぐらいの年収の人に広げるかである。

オバマ氏は年収25万ドル(約2100万円)超を主張していたが、40万ドル超の妥協案を提示。増税に反対だった共和党のベイナー下院議長も100万ドル超を認める方向に転じた。時間切れが迫る中、互いに歩み寄る姿勢を見せたのは当然だろう。

しかし、交渉の主導権確保を狙ったベイナー氏が突然、年収100万ドル以下への減税を先行させる独自案を提案。いかなる増税にも反対だとする身内の共和党保守派の反撃で採決断念に追い込まれ、暗礁に乗り上げてしまった。

これを受けて、オバマ氏は年内の残る期間で中間所得層減税と失業保険給付を延長する暫定措置を先行させる考えを表明した。共和党が優先課題に掲げる歳出削減を年明けに先送りするものだが、緊急避難策としては妥当な案ではないか。共和党の柔軟な対応を期待したい。

このほか10年間で確保する歳入規模や公的給付カットの是非など、与野党の争点は少なくない。オバマ氏は包括的な財政再建策を年明けに作る意欲を示している。対立を解く内容になるのかどうか注目される。

協議の不調を受け、前週末のニューヨーク、東京両株式市場の平均株価は下落した。行方によっては、せっかく動きだした円安株高の流れも一変する恐れがある。

内閣府は、決裂を回避できない場合、米国の投資や消費の減少で日本経済の実質成長率は年率0・4%弱押し下げられ、円高が加われば下げ幅はさらに拡大するとしている。

崖から転落するまで残り6日。その影響は計り知れない。世界中が固唾(かたず)をのんで見守っていることを忘れないでもらいたい。
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