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Former Debt Commission Member Alice Rivlin on what is needed to avoid the fiscal cliff.
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Are many say is right now the world's greatest in the country that everyone seems to agree -- battle is not the world's greatest but far.
And that America early agrees say -- Brothers there about that didn't stop rioters -- showing their anger there.
Protest against too much of austerity and what they think kids all of that at the hands of the -- think you can't happen here.
Former CBO found -- record that commission member Alice Rivlin has looked at our books she says that the rate we're going don't think you can.
-- -- -- -- -- Glad to be here now you know you monitored the congress -- before was seems to think that the way we avoid.
I guess this fiscal cliff everyone's talking about.
Is.
The six month extension in every bank.
For new president or reelected president.
To deal with how likely think that is.
I think it's quite likely but it can't be just kicking it down the road for six months.
I think the lame duck session has got to do to other things.
One is put in place apply and that would -- issue instructions to the regular committees of congress ways and means finance.
To bring back a plan -- grand bargain that involves both the entitlements and taxes.
Reform as she said.
It within six months and give them some numbers to shoot for.
And the second thing which people are talking about at the moment is to have a default position.
Something like the Simpson Bowles learn to -- -- Rivlin plans that would come into effect automatically.
If the congress didn't succeed in the six months period.
That's a little much.
A little more of along -- idea I think the first.
The first two parts are up.
Are really important you can't just -- -- down the road think what the market reactions would be if we just kick it down the road for six months we've done that before.
We have done -- which makes me consider what you're talking about now you know hope springs eternal this would be a different that time period are but.
You know if you think about these automatic sequestration cuts this was something both sides agreed to as a fallback in case they didn't have the spine.
To cobble together deal they didn't have that's fine so now what they're effectively saying.
Let's push the spine had six months now you hope that in that meantime they do something but history suggests invariably they do not then -- be real -- the -- Well that's right but that's why having a fallback position that actually solves the problem.
Would it is a more attractive option.
Then a fallback position which gives you a fiscal cliff that nobody wants to go over I think I think it would be quite disastrous for.
The near term economy would probably be back in recession.
If we raise taxes.
Abruptly.
In.
January and we cut spending by that much.
That's not what we ought to do the congresswoman had it right we need to focus on the long term.
Do the entitlement adjustments and the tax reform that we need to bring those two lines together over time gradual.
