A Band-Aid on Cancer

Before the Congress breaks its arm patting itself too vigorously on its back, let’s review a little bit of what they just did in saving us from the so-called fiscal cliff:

• They ignored the spending side of the deficit equation because the two parties are light years apart on any sort of agreement on how to reduce government spending, even while both parties claim they are willing;
• They left the tax code in a mess, squandering the best opportunity in many years to reform it  because, well, they can’t agree on which tax loopholes are good and which ones are bad;
• They punted the raising of the debt ceiling down the road two months, thanks to some creative bookkeeping by Treasury Secretary Timothy Geithner, who is juggling the books for two months to gain some time and save the U.S. credit rating, because Congress (let’s say it in unison now) … can’t agree on what to do.

As some of the country has slowly emerged from the Great Recession, the construction industry has lagged behind because so much money is sitting on the sidelines waiting for some certainty from Washington, D.C. What we need is a 10-year comprehensive plan that spells out how we’re going to get our fiscal house in order. It won’t be pretty and nobody will be happy because both sides have to compromise. But at least it will provide certainty.

If you’re running a precast concrete business, you know what’s going on out there. State and local governments are keeping projects on the shelves, developers are holding back on new construction and hiring, and as a result the construction industry – and our precast concrete sector – have been in a holding pattern. And now what we’ve gotten in this latest deal is more uncertainty with the promise of a couple more rancorous months leading up to the next “cliff” at the end of February.

Our leaders have basically tried to heal the nation’s woes by putting a Band-Aid on cancer. In this protracted holiday negotiation where all sides want to claim “win-win,” it turned out to be a “lose-lose” scenario, and the losers are the American public and the construction industry. Why? Because the recent actions will add an estimated $4 trillion to the deficit over the next 10 years. But don’t worry, they’ve promised to fix it next time.

Ty Gable
President, National Precast Concrete Association