Editorial: ‘Fiscal Cliff’ Averted
While the solution that Washington “crafted” to the looming “fiscal cliff” was far from perfect, it seems to have gotten the job done.
And deep inside the agreement that the Senate initiated, the House accepted and President Obama signed as 2012 gave way to 2013 is an extension of a tax credit that should help the trucking industry renew its aging fleet.
As we report on page 1, the agreement includes an extension of the bonus depreciation program, which will allow companies to take a tax credit equal to 50% of the acquisition cost of a new truck off this year’s tax return.
This program began in 2010, during the depths of the recession, and several analysts say it definitely encouraged fleets to buy more vehicles. It had been scheduled to expire on Dec. 31.
Truck sales have been flagging of late, in part owing to fleets’ concerns over the fiscal cliff and its potential impact on the overall economy.
So, passing a compromise solution and including an extension of the bonus depreciation should be a good tonic for truck makers, truck dealers and truck purchasers.
Also in the legislation is an extension of the $1-a-gallon tax credit for biodiesel producers. This could help keep retail fuel prices down a bit.
That’s the good news.
On the other hand, the fiscal cliff compromise didn’t come anywhere near solving the gap between federal revenue and federal expenses, as Congress and the White House had to agree to kick the can down the road in order to prevent the chaos that might have resulted from the nation going over the cliff.
And it appears that the some House GOP members are preparing a new battle over raising the national debt ceiling later in the year. And with President Obama already saying he’s not going to negotiate with Congress over this, we could be heading for another catastrophic showdown.
The last time federal spending bumped up against the debt ceiling, analysts warned of an impending economic crisis, similar to the warnings that came before the fiscal cliff solution.
Let’s hope that the fiscal cliff resolution means that there are enough cooler heads on Capitol Hill these days to help forge a workable compromise that serves the nation and its economy well.
