Federal Reserve Chairman Ben Bernanke is credited with popularizing the term “fiscal cliff” earlier this year to describe the tax hikes and spending cuts the country faces at the start of 2013. Asked during a Wednesday press conference if he still believes "cliff" is an apt characterization, Bernanke said he does. Here’s how other economists, lawmakers, and writers have described the year-end … oh, you know.
- Fiscal cliff. “In terms of the terminology, well, people have different preferences about what they want to call things. I think it’s a sensible term because I think of the fiscal policy providing support to the economy. If fiscal policy was very contractionary, then the economy would, I think, go off a cliff. I think it’s reasonable to be concerned about this. I don’t buy the idea that a short-term descent off the fiscal cliff would be not costly.” (Ben Bernanke, Dec. 12 press conference).
- Austerity crisis. “The tax hikes and automatic spending cuts that would kick in after Dec. 31 would sharply curb our federal deficit through enacting major, sudden austerity measures that would save the U.S. government about $720 billion in 2013 alone…. The reason the fiscal cliff is so scary is that it’s an austerity crisis.” (Suzy Khimm, The Washington Post, Nov. 9)
- Fiscal slope. “The sooner policymakers enact legislation to put the budget on a sustainable long-term path without threatening the vulnerable economic recovery, the better. But, as they prepare for an almost certain postelection 'lame-duck' session of Congress, policymakers should not make budget decisions with long-term consequences based on an erroneous belief: that the economy will immediately plunge into a recession early next year if the tax and spending changes required under current law actually take effect on January 2 because policymakers haven't yet worked out a budget agreement…. In fact, the slope would likely be relatively modest at first (and then much steeper if 2013 unfolds without a fiscal resolution).” (Chad Stone, Center on Budget and Policy Priorities, Sept. 24 report).
- Fiscal obstacle course. “For various reasons, 'fiscal cliff' is a poor metaphor, most importantly because there is no single cliff but rather a series of separable tax and spending provisions that can be extended or ended. We thus propose a different metaphor—the fiscal obstacle course—with the obstacles in question standing in the way of rapid economic recovery and lower unemployment.” (Josh Bivens and Andrew Fieldhouse, Economic Policy Institute, Sept. 18 report).
What's in a name, anyway? “I don’t spend a lot of time worrying about whether it’s a slope or a cliff,” outgoing Senate Budget Committee Chairman Kent Conrad, D-N.D., said in an interview with National Journal this week. “I like to deal with facts.… I think the realistic assessment is, it would be much better to [reach a deal] before the end of the year, because you’d remove uncertainty, but I also think it’s not the end of the world if it didn’t happen until early in the next year.”
Katy O'Donnell and Caren Bohan contributed