Whew, that was close. At the 11th hour Congress averted fiscal calamity by compromising on a plan that raises taxes on the wealthiest Americans. But if you think that's the end of this story, think again. This is more like that cliffhanger non-ending of the "The Empire Strikes Back."
Lawmakers gave themselves two more months to work out spending cuts before automatic, across-the-board cuts take effect. Will that be enough time to get the job done? Remember, it took them more than 500 days to get this short distance.
What is clear now is that our nation's basic financial equation remains flawed. Despite raising taxes on individuals who make more than $400,000 and couples who make more than $450,000, this plan will add $3.9 trillion more to the federal deficit over the next 10 years.
The Heritage Foundation uses this example to illustrate the spending excess: In 2010, the median family income was $51,360. If that family were like the federal government, it would have spent $73,319. Obviously that's not sustainable. We have to get spending in line with revenues and find a way to control our debt.
However, knowing that and doing something about it are two different things. Lawmakers have a difficult time facing painful fiscal realities. They don't want to talk about the end of the 2 percent payroll tax holiday, although workers will notice that in their paychecks soon enough. They haven't wanted to talk about cutting entitlements, although President Obama acknowledged the other day that they're going to have to do something to contain Medicare costs.
Maybe they're finally getting it. The fact that neither side is happy probably is a positive sign. But stay tuned for the next part of the saga.