The Fiscal Cliff: What You Need to Know in Plain English (and Spanish)

Before joining the Florida International University College of Law, Professor José Gabilondo served in the Department of the Treasury’s Office of the Assistant General Counsel for Banking and Finance, where he advised the Bureau of Public Debt, the Social Security Trust funds, and other executive departments on a variety of legal matters.

We caught up with him to get his views on the fiscal matters that have been in the headlines.

FIU Law: What is the “fiscal cliff?”

Gabilondo: This an alarmist metaphor that refers to a package of statutorily-required federal tax increases and spending cuts that kicks in January 2nd of next year, unless Congress can come up with another fiscal plan.  Ironically, this was the solution to a more serious problem: gridlock in Congress over raising the federal debt limit while curbing run-away spending.  A divided Congress punted until after the election by agreeing tax increases and spending cuts that were never expected to see the light of day.  So the package is remarkably fair because it spreads the fiscal burden broadly, balancing conservative and liberal values and putting in place some sound reforms.  Congress didn’t mean to act responsibly, effectively, and in the public interest, but they did.

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