Skepticism remains despite "fiscal cliff" deal
Wall Street soared Wednesday after the House of Representatives passed the deal that moved the country away from the fiscal cliff.
Enthusiasm over a last-minute budget agreement to avert sweeping tax increases on Capitol Hill pushed the Dow Jones Average up 308 points at closing. Inaction on companion spending cuts, however, has prompted skepticism.
"The Federal government is spending about 30 percent more than it is taking in right now. So think of it as we are taking in $100 a month in revenue and we are spending $129," said Kevin Brinegar, Indiana Chamber of Commerce.
Brinegar says small business will continue to flounder until Congress addresses its spending problem.
"The bill they passed this week only takes in $3 more. So now we are taking in $103 a month and we are still spending $129. It doesn't solve the problem."
"Stop playing games and get down to business," said Brian Biehn.
Just over a year ago, Biehn started Van Valer Home Services Plumbing and Heating. Now, his company has 15 employees, but expenses coupled with increasing taxes and uncertainty out of Washington is hindering expansion.
"We need to work on cutting expenses. That is what I have to do in my business. I can't keep printing money or doing what I want to do unless I can pay for them. I'd like my government to do the same thing," he said.
The last-minute compromise was crafted to avoid what many deemed to be draconian, one-time cuts, but UIndy business professor Dr. Matt Will says those cuts are needed.
"If it would have happened, we would have gone from $1.1 trillion in new debt to $500 billion. That is a pretty big cut in our deficit and, at the time, we thought they were brave for doing the right thing. Apparently, they chickened out," Will said.
Congress did extend a one-year Production Tax Credit and Investment Tax Credit directed at the wind industry. Currently, 18 Indiana companies manufacture wind energy components and two new facilities have been announced, including one in Muncie.