This compromise resulted in the Budget Control Act of 2011, which offered a number of short-term fixes. The Act raised the debt ceiling to 2.4 trillion dollars and reduced proposed increases to future spending. It created a bipartisan Joint Select Committee on Deficit Reduction (the "Supercommittee") that would work on more permanent solutions. To encourage bipartisanship, the Act called for a number of automatic economic triggers that would have severe consequences for the U.S. economy, if the Supercommittee failed to iron-out a workable economic plan or if Congress failed to enact it into law. These triggers were scheduled to go into effect on December, 31, 2012. Some of the changes were 1) the end of last year’s temporary payroll tax cuts (resulting in a 2% tax increase for workers), 2) the end of certain tax breaks for businesses 3) shifts in the alternative minimum tax 4) a rollback of the "Bush tax cuts" from 2001-2003, and 5) the beginning of taxes for Obamacare. Additionally, the spending cuts agreed upon as part of the debt ceiling deal of 2011 were to go into effect. Clearly, no one intended the triggers to actually be set off, but instead thought that the threat of them, would spur compromise.
The objective of the Supercommittee was to develop a deficit reduction plan that would avoid a U.S. sovereign default. In order to limit partisan gridlock, the Supercommittee's recommendations were to be subject to a simple vote by the full legislative bodies without amendment. Unfortunately, the Supercommittee was unable to come up with a plan. Consequently, we find ourselves at the fiscal cliff—when the temporary terms of the Budget Control Act of 2011 end. Well, the government went over the cliff, but luckily it was only for 21 hours.
You don't have to be a conspiracy theorist to see the Republicans have conspired to make Obama's presidency a failure. The debt-ceiling must be raised! It always has been. It was under Reagan that the debt grew the most, yet he is the Republican icon. So, why all the political jockeying? Are President Obama's ideas so far to the left of Clinton's that the Republicans have decided they must make a stand now! The Republicans have found a way to hold the executive office hostage, and they have decided to do it at this unique time in history--when the nation has elected its first black president. Is it race or politics that's handcuffing America? Probably a little or a lot of both. Or maybe the Republicans are extremely far-sighted: They know that if the first black president is (perceived as) a failure, then the likelihood of there ever being another one becomes an extremely remote possibility!