New Year’s Day typically inspires hope and new beginnings. But this next one may be cause for trepidation. Tax cuts for all income levels expire on Jan. 1, 2013, and most federal programs will face a 10 percent haircut — because Congress failed to agree on a deficit-reduction plan.
It all goes back to some hot, frantic days in late July and early August of 2011. Treasury officials were warning that the nation was near defaulting on its debt for the first time. Congressional Republicans, spurred by Tea Party activists, set off this unprecedented crisis because they refused to raise the government’s borrowing limit unless spending was cut by an equal amount. And they would not accept more revenue as a means to offset a hike in the debt ceiling.
A Last-Ditch Scramble
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