This Editorial appears in the Dec. 10 print edition of Transport Topics. Click here to subscribe today. Concerns about the “fiscal cliff” seem to be spreading into lots of unexpected places, including the heart of the trucking industry.
Analysts said orders for new trucks are being held back because fleets are worried about the effect the machinations in Washington may have on the nation’s economy in early 2013.
So, even though fleets would normally be placing orders for next year’s round of tractor purchases, they are holding back until they’re sure we’re not headed for a new recession if the draconian spending cuts and tax increases aren’t headed off by a new budget agreement.
Last week, in a meeting with company leaders who are part of the Business Roundtable in Washington, President Obama himself noted the effect the wrangling over the fiscal cliff is having on the economy. “What’s holding us back right now, ironically, is a lot of stuff that’s going on in this town,” the president said.
The Business Roundtable members have been urging both parties to find a way through the stalemate in order to forge an agreement to raise revenues and cut spending before the automatic cuts go into effect.
A day later, Obama said that if business leaders “don’t have confidence that we’re going to get this done, then they’re going to start pulling back” on hiring and expansion plans.
When the Budget Control Act of 2011 was approved by Congress and signed by Obama, it included a series of large funding cuts and tax increases for all income levels that would become effective if the parties didn’t agree to a long-term solution to the growing federal budget deficit.
While congressional Republicans want to focus more on spending cuts without raising taxes, Obama has said he won’t sign any agreement that doesn’t raise taxes on those at the top of the income scale.
If nothing is done, the spending cuts and tax increases will automatically begin on Jan. 1.
Many analysts have warned that the reduced spending and higher taxes would severely restrain future growth and could send the U.S. economy back into recession.
We again call on the parties to find a solution, before we all fall off the fiscal cliff. The nation’s economic health requires action, and the American people have every reason to expect their political leaders to solve this problem now.
