US debt ceiling

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The Fiscal Cliff – A Done Deal, But How Good?

As I wrote back in December, everyone understood the need for a deal to be made between President Obama and Congress to avoid going over the ‘fiscal cliff.’ That is, to come to an agreement that would avert the scheduled expirations of a host of tax cuts and reductions in spending on programs like defence and social welfare benefits.

But when it comes to negotiations between this President and his Republican counterparts in Congress, anything can and did happen. Over the course of the roughly two months between the President’s re-election and the final deal being signed on January 2 (technically, after going over the cliff), we saw offers and counteroffers made, concessions made on both sides, and much sniping across the partisan divide.

Irrespective of the details of the fiscal cliff deal, in light of the way both sides conducted their policymaking negotiations, how might one best describe the decision making process on an issue of global economic significance?

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