It seems that with the expiration of each year it becomes more and more apparent how damaging and dysfunctional our government can be. And here at the end of 2012, our dysfunctional legislative branch has left us teetering on the edge economic uncertainly with the “fiscal cliff” and the current debt ceiling set to reach its limit on December 31st:
The United States will reach its $16.4 trillion borrowing limit on Dec. 31 and undertake “extraordinary measures” to avoid default, the Treasury Department informed congressional leaders in a letter on Wednesday.
“Given the significant uncertainty that now exists with regard to unresolved tax and spending policies for 2013, it is not possible to predict the effective duration of these measures,” Geithner wrote.
The Treasury chief, facing the second debt-ceiling breach of his tenure, said the government has $200 billion worth of “extraordinary” actions it can employ to prevent default, typically by shifting funds from various nonessential purposes to essential government functions.
Under normal conditions, that would buy policymakers about two months to haggle over the debt limit before an increase would be required, Geithner said. The last time the government reached its debt limit, in May 2011, Treasury’s measures delayed the need for a debt-ceiling increase until August.
But the uncertain fate of the nation’s tax and spending policies in the talks over the fiscal cliff has clouded Treasury’s calculations, Geithner said.
If policymakers do not strike a deal and the U.S. goes over the fiscal cliff, the combination of tax hikes and spending cuts is expected to push the U.S. economy into a recession.
In addition to both of these issues, if no deal is reached on the fiscal cliff, hundreds of thousands of people will lose their unemployment benefits which are set to expire at the end of 2012. Ezra Klein explained the consequences on Friday’s The Rachel Maddow Show:
“If no deal is reached by Tuesday, it ends. It ends for 30,000 people in in Tennessee, 85,000 in people in Michigan, for 119,000 people in Florida; these are the people who have been hit the hardest by the Great Recession and who are the worst off right now – two million of them across the country.”
In other words, the inaction of government will bring serious pain to millions of people across the country.
WATCH (story continues below):
Couple unemployment with the expiring Farm Bill and you have a recipe for disaster. Like the Violence Against Women Act, the Farm Bill has been stalled in the House for months because Republican lawmakers are completely disinterested in doing their jobs and have allowed them to lag until the 11th Hour, and at this late stage in the game, the chance for any resolution is quickly disappearing.
Unfortunately, the fading Farm Bill could have drastic consequences on the pocketbooks of families across the country, especially those facing expiring unemployment benefits, as the expiring measures could cause the price for such staples as milk, cheese and yogurt to double:
The latest Farm Bill, enacted in 2008, is scheduled to expire at the end of 2012. If it expires, the 1949 Agricultural Act goes into effect, which includes a floor for milk prices.
It’s what is known in Washington-speak as a “poison pill.” To give Congress extra incentives to pass a new Farm Bill, the current law includes provisions that if it were to expire at the end of the year, the 1949 law would go into effect. You could also call it an agricultural cliff.
How does the 1949 Agricultural Act get us to $7-per-gallon milk?
The 1949 bill mandates that the secretary of agriculture set a floor on prices for the milk sold by producers (usually dairy cooperatives) at what’s known as the parity price. According to the 1949 bill, that price is $39.53 per hundred pounds (PDF). The prevailing price for dairy producers is closer to $19 or $20 per hundred pounds. That $39.53 translates to roughly doubling milk prices, which means that the price for a gallon of milk would go up to about $7.
Democratic lawmakers are trying to scurry to come up with an extension to avoid the expiration and the dramatic increase in prices:
Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.), who previously had opposed a one-year extension, told reporters Friday that she was shifting gears and preparing a one-year bill.
“That’s the only way you can do it, extend all of them,” she said.
Stabenow said that a simple extension would have to be passed under expedited procedures. She said any member filibustering the extension would face massive ire.
“Whoever objects to it would have to deal with doubling the price of milk,” she said.
The thing that’s so infuriating about all of this is that all of it could easily have been avoided, but for the fact that the Republican Party has lost its collective mind and refuses to do what they were elected to do – govern. Instead, their aim has turned to bringing the government to its knees, which in turn brings hardship and pain to the citizenry through their actions – or lack thereof.
It is absolutely mortifying that these people have become our elected representatives.