Beyond the Fiscal Cliff

FISCAL BATTLES AHEAD

This week’s announcement that the Treasury Department expects to run out of ways to avoid defaulting on the country’s obligations as early as mid-February and the ongoing debate about raising the debt ceiling reminds us that fiscal issues will continue to dominate national policy discussions throughout the year. 

While the recent Fiscal Cliff deal averted a slew of tax increases, it only pushed across-the-board cuts to federal programs (known as sequestration) two months down the road. The agreement, known as the American Taxpayer Relief Act of 2012 (H.R. 8), delayed difficult sequestration decisions that will now coincide with the debt limit debate as well as the expiration of the continuing resolution (CR) currently funding the federal government in place of a fully authorized budget. As no spending cuts were enacted to avert the Fiscal Cliff, some policymakers may push strongly for deep cuts in safety net programs in these upcoming fiscal negotiations. 

National CAPACD continues to support a balanced approach to deficit reduction that requires the wealthy to pay their fair share, protects social safety net programs from further spending cuts, and supports the economic recovery in our communities.

Click here for a fact sheet that includes an overview of key community economic development priorities still subject to sequestration, and details important community development and affordable housing programs addressed by the Fiscal Cliff deal, including:

  • New Markets Tax Credits
  • Low Income Housing Tax Credits
  • Mortgage Forgiveness Debt Relief
  • Mortgage Insurance Deduction
  • Mortgage Interest Deduction

Please keep checking back with National CAPACD in the coming weeks for the latest information on these critical issues.The Fiscal Cliff was averted at the last minute, but there are still significant challenges ahead.