The Dangers of Cliff Walking

Referring to the impending fiscal cliff, Gene Sperling, director of the National Economic Council and assistant to the president for economic policy, told ABC's Jonathan Kalb. "There is no reason we should not be able to work this out."

The two opened their panel at the Washington Ideas Forum Thursday with a discussion on Governor Mitt Romney's recent comments about Obama buying his way to the presidency by bestowing "gifts" on the African-American community, the Hispanic community and young people.

"It's a disappointing comment," said Sperling, who also held the post under President Clinton. "It misses the fact that it's in the best tradition of our country to do things that empower people to have better education, better health care, give more middle class families the opportunity to raise their children with dignity, work with dignity, retire with dignity. Those are only special interest gifts to the extent that one believes that taking policies that lead to a stronger and growing, and more inclusive, middle class is a special-interest issue as opposed to something that's at the heart of our national interest."

Also at the heart of the national interest, Sperling said, was avoiding going over the fiscal cliff. Sperling said that perception of going over the fiscal cliff has a great impact on how much larger companies cut back on their productivity or hiring, and how much confidence the American consumer has in the economy. 

"You could measure it just in the degree of contraction," he said, "and I think there's no question that itself would have a negative impact on our economy. But compared to what we're projecting, it would obviously make things significantly worse.

Sperling said, "If people believe it's going to happen ... the harm to confidence that we were not able to come together as a country and work out our problems could have an impact that I think is greater than a technical impact than an economist might figure just by looking at how much taxes went up. "

Sperling reiterated the president's plan of maintaining tax cuts for middle class families, and commitment to both short-term relief and longer-term, sustainable fiscal policy. Despite the impending cliff, he seemed confident in a solution.

"It is not in our country's best interests to go over the cliff," he said. "There's no reason we should not be able to work this out. That's what would be right for the economy and right for the American people. "