Congress and President Barack Obama shouldn’t waste the chance to reach an agreement on fiscal policy in the period between the Nov. 6 election and the end of the year, said Gene Sperling, director of Obama’s National Economic Council.
“In terms of making progress and putting ourselves on a sound fiscal path, the lame-duck would be a terrible thing to waste,” Sperling said in a brief interview in Charlotte, North Carolina at the Democratic National Convention.
More than $600 billion of automatic spending cuts and tax increases are scheduled to take effect in January if Congress doesn’t act. In 2010 and 2011, Congress and the Obama administration aligned the deadlines for the spending and tax provisions to expire, compressing everything into a single fiscal cliff at the end of 2012.
“We, by agreement, put a gun to our heads to help force all of us to come together to make progress on a significant agreement that has to include revenues for those who can most afford them as well as smart and sound reforms on entitlements,” Sperling said. “Hopefully, the lame-duck period will provide the impetus, the incentive, the action-forcing event for us to come together and do what’s right for the country.”
Democrats, including Obama, want to let expiring tax cuts lapse on the top 2 percent of earners. Republicans want to extend the income tax cuts for everyone.
Both sides want to replace the automatic spending cuts with other changes; they can’t agree on how to do that.
The new Congress elected Nov. 6 won’t take office until Jan. 3, 2013. Even if Obama loses his bid for a second term, he’ll remain in office until Jan. 20, 2013.