“Two years, $3 billion dollars and we are clearly in the same…place we were when it started.”--Jon Stewart
What now for the fiscal cliff? “House of Representatives, Republican. Senate, Democrats. Presidency, Barack Obama,” Jon Stewart reflected on “The Daily Show’s” election night broadcast. “Two years, $3 billion dollars and we are clearly in the same…place we were when it started.”
For now, there is talk of bipartisan cooperation. “Tonight you voted for action, not politics as usual,” President re-elect Barack Obama proclaimed in his acceptance speech. “You elected us to focus on your jobs, not ours. And in the coming weeks and months, I am looking forward to reaching out and working with leaders of both parties to meet the challenges we can only solve together.”
Senate Minority Leader Mitch McConnell offered something of an olive branch in a statement released after the president was proclaimed the winner: “To the extent he wants to move to the political center, which is where the work gets done in a divided government, we’ll be there to meet him half way. That begins by proposing a way for both parties to work together in avoiding the ‘fiscal cliff’ without harming a weak and fragile economy….”
The deadline draws closer for the White House and Congress to reach an agreement on the expiring tax cuts and mandatory spending cuts that being in the first of the year. Should a compromise not be reached, the country will likely slide back into a recession, the Congressional Budget Office has warned.
Business owners are monitoring fiscal cliff developments more than Affluent households overall, according to a survey conducted last month by Millionaire Corner. They are the least optimistic about a possible bipartisan agreement, with 58.5 percent saying a deal will not be reached vs. 53 percent of Affluent investors overall.
Should the fiscal cliff deadline lapse, nearly half (49 percent) said they are either very likely or likely to change their asset allocation. In comparison, fewer than one-third (32 percent) of Affluent investors overall said they would be very likely or likely to change their asset allocation. Forty-six percent of respondents overall were neutral on the issue, vs. 36 percent of business owners, who again, are the most likely to take action.
The most significant action business owners said they were likely to take regarding the fiscal cliff is to invest more in cash, said 44 percent of these respondents, compared with 28 percent overall. Thirty percent of business owners—more than twice as many Affluent investors overall--said they would invest more in gold, while 26 percent will invest more in real estate.
Business owners’ responses regarding the fiscal cliff expressed more concern if President Obama was re-elected, an indication they think the political gridlock would continue. Forty-one percent said they would be very likely or likely to change their asset allocation in the case of a second Obama term. In comparison, 30.5 percent said they would be likely to change their asset allocation had Mitt Romney been elected.
But leaders, for now, are saying the right things. House Speaker John Boehner is expected to release a statement Wednesday afternoon calling for Republicans and Democrats to seek common ground” to fix the economy.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.