The U.S. will stop short of the fiscal cliff. Most likely, however, the solution won’t come as a budget deal, but as a promise to work out a budget in the near future. Crisis averted. But repeatedly driving up to the cliff and slamming on the brakes exacts a cost, too. Whatever happens in the next two months will not fix a much longer-term problem—one that costs the federal government money, even when there’s no catastrophe.
That’s because Congress rarely submits its work on time.
According to the Congressional Research Service, Congress since 1952 has completed all its appropriations acts by its own statutory deadlines in only four years (PDF)—1977, 1989, 1995, and 1997. In 1974, Congress decided to give itself an additional four months every year to come up with a budget. This is why the federal fiscal year now begins on Oct. 1. The move merely postponed the predictable: America is run on continuing resolutions.
Source: Bloomberg Businessweek. Read full article. (link)