By Siddarth Kannan ’14, News Editor

The reelection of Barack Obama marks a clear path for the nation for the next four years.  The fiscally left-of-center Obama will try increasing taxes on America’s richest in an attempt to spare the middle class from the burden of the deficit and national debt.  He will attempt to invest considerable public funds into sectors such as education, energy, and health care.  However, the President will face an enormous test of both his true dedication to these principles and his abilities as a politician right at the beginning of his second term – the so-called “fiscal cliff.”

The fiscal cliff is an ominous term referring to a collection of tax increases and spending cuts.  If these policies go into effect, they will take money out of the pockets of all Americans.  Many economists, including Newark Academy’s own IB Economics teacher Ms. Lifson, predict that these fiscal measures will cause a recession.

The important bills that contribute to the fiscal cliff are the Bush tax cuts, the Budget Control Act of 2011, and the Patient Protection and Affordability Act (Obamacare), among others.  The Bush tax cuts are set to expire, which would lead to tax increases.  The Budget Control Act was a measure taken in order to resolve debate over the debt ceiling – the maximum amount of debt that can be issued by Congress.  The Act added to the debt ceiling but provided for a variety of spending cuts; the very ones that would contribute to the fiscal cliff.  Obamacare would also add to the tax increases, further complicating the situation.

The possible solutions to the problem are divided among party lines.  Many Republicans want to extend the Bush Tax Cuts, following the classic conservative tax reduction policy.  House Speaker John Boehner put forth a plan in which taxes are not increased, but rather eliminates many deductions and exemptions from the tax code.  At the same time, the plan provides for cuts to discretionary spending and a tightening of qualifications for Medicare.  Democrats, led by Obama, generally want to extend tax cuts for most while increasing the tax rate on the highest earners.  Obama is willing to concede some spending cuts, but has stated that he wants to spend at least $50 billion in 2013 in order to stimulate the economy.

The fiscal cliff has caused a stir both in and out of Congress.  Many view this situation as one in which the government’s very efficiency is tested, including Mr. Gertler, who is known for his politically outspoken nature.  He falls on the side of the government, believing that they will come to a compromise because they simply “have to.”  He adds that policymakers are aware of the dire possibilities of the cliff, and will therefore come to a definite compromise.

The relative simplicity of the fiscal cliff has led to cynicism regarding the partisan fight.  Athletic director and former AP United States History teacher Mr. Gilbreath is very skeptical as to the legitimate threat posed by the fiscal cliff.  He refers to the fiscal cliff as a “scare tactic,” and compares it to the uproar in 2011 when Standard & Poor’s downgraded American debt, in that it is a false crisis.  He also expresses disappointment with the effectiveness of the government, stating, “the action that people in Washington are taking is to politic harder… they dig in their trenches and bang their partisan drum.”  Mr. Gilbreath’s harsh rhetoric reflects a growing discontent with the government’s ability to compromise and make difficult decisions.

The fiscal cliff is an obstacle steeped in partisan gridlock.  The consensus of economists is that it will cause a recession, and the government therefore needs to take action.  Republicans and Democrats will be forced to consider their commitments to tax cuts and liberal spending, respectively.  A growing cynicism with the partisan system and its ability to deal with important issues makes the fiscal cliff an especially pressing issue.  If President Obama and Congress are unable to solve it, they will indict the government in the eyes of many American people.