Who started the latest 'fiscal cliff' buzz?November 9, 2012: 11:58 AM ET
Federal Reserve Chairman Ben Bernanke is widely credited with coining "fiscal cliff," the ominous term that refers to $7 trillion in spending cuts and tax increases set to be triggered in January.
But the bearded man is the creator of neither the original term, nor its current usage.
"Fiscal cliff" is an expression that has been thrown around for decades with a variety of meanings. The earliest reference we could find was in this New York Times article about homeownership in 1957. Since then, the phrase has been used often by Republicans and Democrats alike in budget disagreements.
Take for example this official statement from Senator Jim DeMint, a Republican from South Carolina, in 2008.
"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."
Fast forward to 2012: We now think of the "fiscal cliff" as a more specific term referring to the Bush tax cuts expiring on December 31 and the sequester on January 2. Bernanke thrust that meaning of the term into the public eye on February 29, 2012, when he spoke before the House Committee on Financial Services:
"Under current law, on January 1st, 2013, there is going to be a massive fiscal cliff of large spending cuts and tax increases. I hope that Congress will look at that and figure out ways to achieve the same long run fiscal improvement without having it all happen at -- at one date."
But Bernanke wasn't the originator of the current iteration either, as far as we can tell. Several Reuters articles had already used the phrase with that same definition two weeks earlier: "Geithner: year-end fiscal cliff to hit U.S. growth" for example.
And check out this excerpt from another Reuters article, "'Fiscal cliff' looms for United States in late '12," printed on February 17, 2012, before Bernanke's infamous testimony.
"Big tax and budget decisions will not confront U.S. lawmakers for months now that Congress has extended the payroll tax cuts, but a reckoning will be at hand in late 2012 and early 2013. It is being called the 'fiscal cliff' by some on Capitol Hill, and it will likely arrive after the Nov. 6 presidential and congressional elections. The elections are likely to involve intense debate about what should be done."
We reached out to Reuters to see if they would take credit for attaching the term to the current congressional kerfuffle, but alas, they denied the honor and reiterated it was already a common utterance among Beltway insiders.
"While we appreciate the compliment, the term 'fiscal cliff' was floating around Capitol Hill for some time before we printed it," Howard Goller, Washington editor of Reuters Professional News wrote in an email to CNNMoney.
The Fed -- not surprisingly -- had no comment.