Former White House Budget Director Warns Of Fiscal Cliff Consequences | News
WASHINGTON, D.C. (WUSA) -- Alice Rivlin does not like the term "fiscal cliff," calling it more like a gentle fiscal slope.
"You don't pay taxes all at once on the first of January, you pay them over a year," Rivlin said.
But whatever you call it, she said if lawmakers don't avoid it, it would have serious consequences for the U.S. economy.
"We might have a recession and we might have a very negative market reaction," according to Rivlin.
The former director of the White House Office of Management and Budget and the Congressional Budget Office, Rivlin was the keynote speaker on Wednesday at the annual meeting of the Metropolitan Washington Council of Governments, whose leaders said the Washington area would lose 450,000 jobs should the nation plummet down the fiscal cliff. Rivlin said she doesn't think that will happen because both Democrats and Republicans are well aware of the dire economic situation, and the political fallout, that would likely result.
"It is an unnecessary, artificial creation which only shows us that our political system at the federal level is not working," Rivlin insisted.
As for what's to blame for the budget problems that led to the possibility of the fiscal cliff, Rivlin said the major issue was not a matter of party politics. Instead, Rivlin points to the aging U.S. population, which in recent years has significantly increased spending on Social Security, Medicare and Medicaid.
"We have to figure out what to do in the face of this demographic tsunami and the fact that our health care spending is going up too rapidly," Rivlin said.