For business owners, today's paralyzing uncertainty over spending and tax policies could balloon into full-fledged economy-stifling retrenchment in spending and hiring, which in turn could rekindle another recession. Likewise, the military would be smacked with a 10 percent across-the-board cut that would hurt military families and programs.
And the negative impacts of gridlock don't stop there. Global financial markets had counted on the Senate, House and White House coming to their senses with a deal or at least a framework for a broader agreement on taxes and spending early next year. Even after a compromise failed last week, investors avoided a widespread, confidence-rattling sell-off. However, if the new year begins without at least the hope of a deal, we can all expect one more hit on our bottom lines, as 401(k) accounts tank.
These dire consequences are avoidable if Congress and the White House somehow could seize victory from the jaws of defeat. Early last week, the two sides seemingly had made progress on a deficit reduction plan that included new revenue, spending cuts and entitlement changes. But that all fell apart when Democrats screamed about changes to entitlements and Speaker John Boehner was unable to get his own "Plan B" proposal through the House.
Ironically, the actual dollar gap between their positions is narrower than the ideological chasm; Boehner and the president were moving toward a tax cut for most Americans, an increase for the wealthiest and roughly $1 trillion in spending cuts. It's philosophical rigidity that is holding the nation hostage; ideologues in each party prefer to play chicken with economic disaster rather than give an inch. Never mind that some sharing of the pain will be necessary to solve both long- and short-term debt issues.
The sort of brinksmanship playing out in Washington is especially dangerous now that the fiscal cliff deadline is only a few clock ticks away. Inaction is not an option, nor is it leadership. This intransigence will hurt average Americans and send another signal that the nation's lawmakers are better at talking big than governing well. Congress must end this nonsensical impasse now before it mires the nation in another economic crisis.