Falling Off the "Fiscal Cliff"

Last February, Federal Reserve chairman Ben Bernanke warned the House of Representatives that "under current law, on January 1st, 2013, there is going to be a massive fiscal cliff of large spending cuts and tax increases." Now, with the election over, President Obama and the lame-duck Congress are trying to figure out a way to avoid the "fiscal cliff." But where did the phrase come from? And is the cliff metaphor really so apt?

The term fiscal cliff has inspired a great deal of media commentary lately. I've been interviewed about it by CNN Money and BBC News, and I've talked to the public radio show "Here and Now" about the possibility of fiscal cliff being a contender for the American Dialect Society's Word of the Year. As chair of the society's New Words Committee, I'll be helping to oversee the selection process at our annual meeting in the first week of January. (And before you ask, yes, the Word of the Year can actually be a phrase like "fiscal cliff" — as long as it's a lexical item, i.e., something that could appear as a dictionary headword. More discussion here.)

If "fiscal cliff" did win the Word of the Year selection, it would be somewhat similar to the choice of bailout for the 2008 WOTY. Four years ago, when Obama was first elected, harsh economic realities swamped the post-election headlines, and "bailout," while not a new word, was certainly a significant term for that year's unfolding financial crisis. Now we find ourselves in another type of crisis, with its own particular key words.

The current budget impasse has been foreseen for a long time. Last year, you may recall, a Congressional "supercommittee" was tasked with resolving the debt ceiling crisis. Here is what I wrote when I listed supercommittee as a nominee for WOTY in 2011 (when the winning word turned out to be occupy):

The Congressional committee charged with finding a solution to debt reduction turned out to be not so super after all. Instead, to use the overworn political expression, they simply kicked the can down the road. Because the supercommittee failed to come up with a solution before the November 21 deadline, Congress is now faced with the possibility of mandated cuts, known as sequester or sequestration. If those massive budget cuts do indeed kick in automatically, look for sequester to be a contender for Word of the Year in 2012.

Sequester has indeed remained a central term in the current budget debate, but Bernanke's introduction of fiscal cliff in a February House committee hearing provided a much more evocative expression. As I told CNN Money:

The "cliff" metaphor is evocative in that it calls to mind cinematic "cliff-hangers" going back to the silent movie era. And the image of "driving off the (fiscal) cliff" is now a potent one thanks to the climactic scene in "Thelma and Louise."

Long before "Thelma and Louise," however, Hollywood created another lasting image of suicidal cliff-jumping. The 1958 Disney documentary "White Wilderness" showed hordes of lemmings jumping off a cliff in Alberta, Canada, helping to popularize the misconception that lemmings commit mass suicide when migrating. But the film-makers staged the whole thing, since they weren't shooting an actual lemming migration.

Whether your metaphorical point of reference is "Thelma and Louise" going out in a blaze of glory or those misunderstood lemmings, nobody wants the nation's economy to go over a cliff. But as BBC News reported, there are many who think that Bernanke's metaphor is misplaced, since there isn't actually a "point of no return" leading to a calamitous fall. Derek Thompson of The Atlantic has suggested other metaphors, such as "fiscal slope" or "fiscal hill."

Slope and hill don't pack the topographical punch of cliff, of course. A similarly precarious term is precipice, and I managed to dig up examples of the phrase fiscal precipice going all the way back to 1893. An editorial in the Chicago Tribune that year about the gold standard had the line, "The free silver shriekers are striving to tumble the United States over the same fiscal precipice." Fiscal cliff, though appearing in a 1957 New York Times article about home ownership, didn't hit its rhetorical stride until the '70s and '80s, when it began to be used by those warning about crises involving city, state, and federal budgets.

"Who hasn't looked with horror at New York City's financial plight? The nation's biggest, richest city is about to go over the fiscal cliff if the state and federal governments don't lend a helping hand." — Dallas Morning News, June 16, 1975

"Analysis has schools heading off fiscal cliff again." — Cleveland Plain Dealer, Jan. 6, 1981

"Should the economy worsen or Congress approve all the new budget cuts proposed for the next year, a number of states are sure to go over the fiscal cliff." — Chicago Tribune, Aug. 1, 1982

"Remember the battle of the California budget? Remember the state was supposedly going over a fiscal cliff because of Proposition 13 and the recession?" —San Diego Union, Oct. 3, 1983

"The process allows the city [Portland] to alter course well before reaching the edge of a fiscal cliff." — The Oregonian, Nov. 25, 1985

In 2008, Republican Senator Jim DeMint of South Carolina said, "We are trillions of dollars in debt and Obama's massive new spending program threatens to send our nation over a fiscal cliff, leading to higher taxes and fewer jobs." But it was Bernanke who applied fiscal cliff to the current situation, in which the Bush-era tax cuts are set to expire on December 31 and the budget cuts of the "sequester" would kick in on January 2. If Congress and Obama manage to avoid that one-two punch, then we may look back on the fiscal cliff as a bit of unnecessary alarmism. Let's hope that the death-defying nature of the phrase doesn't actually come to fruition, and we come off the precipice.

Update: I had more to say about fiscal cliff on NPR's Morning Edition. Take a listen.