Market Slide Could Force Congress to Face ‘Fiscal Cliff’: U.S. Lawmaker
September 24, 2012
A stock market downturn later this year might provide the kind of pressure both political parties need to avoid a so-called “fiscal cliff,” which includes $500 billion in cuts to planned Pentagon spending, says a key U.S. lawmaker.
As the calendar moves closer to the end of the year, “it’s possible markets will start to react” to continuing congressional inaction on a number of unresolved issues that economists from all political camps predict would combine to deliver a haymaker punch to the still-sluggish American economy.
A market downturn would create among U.S. House and Senate members a “realization [of] the damage it could do to America’s economy,” Senate Armed Services Committee Chairman John McCain, R-Ariz., said during a Sept. 24 forum at the University of Southern California.
The “fiscal cliff” is a term used to describe the perceived effect of a number of budgetary and fiscal laws that are slated to expire on Dec. 31: George W. Bush-era tax cuts, temporary payroll tax cuts and tax reductions for business. That also is when the health care law President Barack Obama pushed through Congress kicks in.