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ONE FISCAL CLIFF DOWN, THREE MORE TO GO?: Congress Reaches Agreement on Fiscal Cliff; Decisions Still Loom on Sequestration, Debt Ceiling, and Fiscal Year 2013 Spending

“We were trying to address the fiscal cliff and we spawned three more cliffs,” Representative Xavier Becerra (D-CA) told “Now, we’ve got to do the tough stuff.”

On January 1, the U.S. Congress passed legislation to extend tax cuts for most Americans and temporarily avert the so-called “fiscal cliff” that was scheduled to go into effect on January 2, 2013. At the same time, however, it merely kicked the can down the road on “sequestration,” postponing until March 1 the billions of dollars in automatic spending cuts to the military and numerous domestic agencies, including the U.S. Department of Education.

Of concern to education advocates, these spending cuts would reduce federal funding for the U.S. Department of Education in Fiscal Year (FY) 2013 by approximately 8.2 percent, or $4.1 billion, according to a report from the Office of Management and Budget (OMB). Among individual programs, an 8.2 percent reduction in funding would mean a $1.2 billion cut to Title I in FY 2013, a $973 million cut to special education, and a $146 million cut to career and technical education. The one silver lining is that these cuts would not affect school districts until the 2013–14 school year, giving schools and districts time to develop plans to absorb the cuts.

By postponing the spending cuts until March 1, it is hoped that Congress will be able to reach a compromise to avoid them. Hopefully recent history is not an indicator since Congress had more than a year to avoid the fiscal cliff scheduled for January 2.

Further complicating matters are two other looming “cliffs.” First, the FY 2013 continuing resolution—the temporary mechanism that Congress enacted to fund the federal government—is scheduled to expire on March 27. Second, the federal government is expected in February or March to reach the “debt limit,” the total amount of money that the U.S. government is authorized to borrow to meet its existing legal obligations.

“We were trying to address the fiscal cliff and we spawned three more cliffs,” Representative Xavier Becerra (D-CA) told “Now, we’ve got to do the tough stuff.”

Already both parties are digging in their heels. House of Representatives Speaker John Boehner (R-OH) said that any increase in the debt limit must be accompanied by equal amounts in cuts to federal spending.

Meanwhile, President Obama seems unwilling to negotiate. “I will not have another debate with this Congress over whether or not they should pay the bills that they’ve already racked up through the laws that they passed,” he said earlier this month. “Let me repeat: We can’t not pay bills that we’ve already incurred. If Congress refuses to give the United States government the ability to pay these bills on time, the consequences for the entire global economy would be catastrophic—far worse than the impact of a fiscal cliff.”

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