Congressional Research Service. November 9, 2012.
The Budget Control Act of 2011 (BCA; P.L. 112-25) provided for an increase in the statutory limit on the public debt in conjunction with a variety of measures to reduce the budget deficit. Included in these measures was the creation of a Joint Select Committee on Deficit Reduction, which was tasked to develop and submit a plan to Congress containing deficit reduction to total at least $1.2 trillion over the FY2012-FY2021 period. However, because the committee did not report out recommendations, the BCA’s automatic spending reduction process was triggered. This process, set to begin on January 2, 2013, would reduce federal outlays over the next decade unless legislation is enacted to prevent it.
http://fpc.state.gov/documents/organization/201049.pdf [PDF format, 13 pages].
Economic Policy Institute. November 15, 2012.
As policymakers begin negotiations on addressing the nation’s fiscal challenges, it is crucial that they clearly understand the economic context of the choices they face, according to the report. It provides analyses and recommendations for specific actions regarding both the impending so-called fiscal cliff and future projected budget deficits. [Note: contains copyrighted material].
http://www.epi.org/files/2012/pm196-fiscal-cliff-principles-for-upcoming-budget-debates.pdf [PDF format, 3 pages].
Council on Foreign Relations. November 14, 2012.
The “fiscal cliff” is a term used describe a bundle of momentous U.S. federal tax increases and spending cuts that are due to take effect at the end of 2012 and early 2013. In total, the measures are set to automatically slash the federal budget deficit by $503 billion between FY 2012 and FY 2013, according to the most recent Congressional Budget Office (CBO) projections. If these numbers are converted to calendar year 2013, however, this contraction would be substantially higher, close to 4 percent of GDP. The abrupt onset of such significant budget austerity in the midst of a still-fragile economic recovery has led most economists to warn of a double-dip recession and rising unemployment in 2013 if Washington fails to intervene in a timely fashion. [Note: contains copyrighted material].
http://www.cfr.org/economics/fiscal-cliff/p28757 [HTML format].
YaleGlobal. November 7, 2012.
President Barack Obama has won the hard fought battle for a second term. The President and U.S. politicians must hurry to put finances in order, warns the author. Congress failing to agree on raising taxes or cut spending invoked a deus ex machina of painful automatic cuts and deadlines. Democrats, Wall Street investors, corporations and activists will push a divided Congress to develop a reasonable compromise that does not impose sudden austerity. “The really bad scenario is if a combination of EU recession, U.S. fiscal tightening and Asian slowdown interacted and fed off one another,” the author writes. A healthy global economy depends on U.S. Congress cooperating with President Obama to contain excessive health-care costs and deficits. [Note: contains copyrighted material].
Congressional Research Service. May 31, 2012.
The gross federal debt, which represents the federal government’s total outstanding debt, consists of two types of debt: (1) debt held by the public and (2) debt held in government accounts, also known as intragovernmental debt. Federal government borrowing increases for two primary reasons: (1) budget deficits and (2) investments of any federal government account surpluses in Treasury securities, as required by law. Nearly all of this debt is subject to the statutory limit. The federal debt limit currently stands at $16,394 billion.
http://www.fas.org/sgp/crs/misc/R41633.pdf [PDF format, 26 pages].