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Retailers Relieved About Avoidance of “Fiscal Cliff”

The agreement was approved by the Senate early this morning and could be considered by the House as soon as today.
By Patrick Burnson, Executive Editor
January 02, 2013

The National Retail Federation today welcomed an agreement reached between the White House and Congress on a plan to avoid the fiscal cliff. The agreement was approved by the Senate early this morning and could be considered by the House as soon as today.

“If our nation had been allowed to go over the fiscal cliff, the consequences would have been devastating for businesses and consumers alike,” NRF President and CEO Matthew Shay said. “With the economy still recovering, taking hundreds of billions of dollars out of consumers’ hands was a risk we could not afford to take. This agreement might not be seen as perfect by everyone, but it gives American consumers and businesses the certainty they need to put worries over this issue behind them and get on with the business of growing our economy and creating jobs. We urge Congress and the White House to move as quickly as possible to get it passed and signed into law.”

While avoiding the tax hikes and spending cuts that would have come without a deal is good news, Shay said the agreement is just a first step in addressing economic issues.

“The Administration and Congress did what was politically easy but will soon have to return to deal with issues that are economically critical if we are to sustain a growing and vibrant economy,” Shay said. “Congress and the White House still need to develop long-term plans dealing with tax reform and other fiscal issues. We have avoided the immediate crisis, but there’s much more to be done before our economy is fully restored.

The was not the only “cliff” that was avoided in recent days. As reported in SCMR, retailers were also cheered by news that the International Longshore Association would call off their strike before the new year. A happy 2013 after all? Stay tuned.

If tax hikes and spending cuts that make up the fiscal cliff had been allowed to go through, retails sales in 2013 would have been flat for the year, with negative growth in the first half of the year, according to an analysis conducted by NRF Chief Economist Jack Kleinhenz working with the economics firm Macroeconomic Advisors. A November White House report said consumer spending could have taken a hit of nearly $200 billion in 2013 if middle-class tax cuts were allowed to expire.


About the Author

image
Patrick Burnson
Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

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