The feelings of stress and fear that military families reported feeling ahead of a decision on the fiscal cliff and sequestration have only been extended, not assuaged, by the deal passed on Jan. 1, First Command reported Monday.
“Days after lawmakers stepped back from the fiscal cliff with a last-minute compromise, military families are now staring over the edge of a second cliff that poses even greater challenges to their long-term financial security and success,” Scott Spiker, CEO of First Command Financial Services, told AdvisorOne in an email. “Many observers, including myself, feel our Congress and president kicked the most challenging issues down the road. They didn’t make any meaningful progress in dealing with the long-term financial challenges facing our country in general and military families in particular.”
Among the issues that needed attention but didn’t receive it, Spiker (left) said, are “meaningful cuts in spending or entitlement programs” like Social Security, Medicare and Medicaid. “While they raised revenues a bit through tax rate changes, they made virtually no progress in reducing our $1 trillion annual deficit and $16 trillion national debt.”
Congress also failed to raise the debt ceiling, although Spiker acknowledged that “Treasury Secretary Geithner did push the requirement to do so down the road for 60 days. This sets the stage for the resumption of contentious politics almost immediately. It may prove important to remember that it was a breakdown in debt ceiling negotiations in 2011 that led to the creation of the potential fiscal cliff problems in the first place.”
Instead of making meaningful tax reform, Congress satisfied itself by “tinkering” with rates. “While they tinkered with rates, they did nothing to make our tax system fairer or simpler,” Spiker said.
Finally, by postponing instead of addressing sequestration, Congress only extended the period of uncertainty for military families. “This failure to deal with across-the-board spending cuts will extend the hardship and uncertainty felt by Americans in uniform for the indefinite future,” Spiker said.