Following Wednesday’s call for Congress to act on the pending “fiscal cliff,” the National Electrical Manufacturers Association (NEMA) underscores the fact that the nation faces risks by not acting expeditiously.
The nonpartisan Congressional Budget Office (CBO) projects that the fiscal cliff will cause the economy to dip into recession in 2013. CBO projects, however, that if these issues were completely resolved, the U.S. economy would add two million new jobs and GDP would grow 4.4 percent in 2013 alone.
“The CBO projections are astounding,” said Evan R. Gaddis, NEMA President and CEO. “They clearly describe the nature of the situation, and should prod Congress to act.”
“The risks of not eliminating this potential devastation are currently holding our country hostage,” said Gaddis. “This shadow is looming over individuals and corporations alike. It is time for our government to come together for America.”
The fiscal cliff is made up of annually appropriated defense and nondefense discretionary spending programs, taxes, and the debt ceiling. All three areas have a major impact across the U.S. economy. Addressing the fiscal cliff immediately and building out a roadmap for long-term debt stabilization will increase America’s economic footing and outlook.
Federal Reserve Chairman Ben Bernanke supported addressing these fiscal cliff issues in testimony before the Senate banking committee this week.
“The most effective way that the Congress could help to support the economy right now would be to work to address the nation’s fiscal challenges in a way that takes into account both the need for long-run sustainability and the fragility of the recovery,” said Bernanke. “Doing so earlier rather than later would help reduce uncertainty and boost household and business confidence.”
The eight deadlines that make up the fiscal cliff are:
- Expiration of the Bush/Obama tax cuts
- Automatic defense and nondefense cuts scheduled for 2013
- Reaching the federal debt ceiling
- A federal government shutdown if 2013 spending bills are not completed
- Expiration of numerous “tax extenders” like the R&E tax credit
- Expiration of the Alternative Minimum Tax fix
- Expiration of Medicare “Doc Fix”
- Expiration of the Payroll Tax Cut
Listen to What is the “fiscal cliff” and how will it impact our economy?
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NEMA is the association of electrical equipment and medical imaging manufacturers, founded in 1926 and headquartered in Arlington, Virginia. Its member companies manufacture a diverse set of products including power transmission and distribution equipment, lighting systems, factory automation and control systems, and medical diagnostic imaging systems. Worldwide annual sales of NEMA-scope products exceed $120 billion.
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