5-Point Guide To The Fiscal Showdown
- The "Fiscal Cliff" Is A Myth. As Paul Krugman put it, "The looming prospect of spending cuts and tax increases isn't a fiscal crisis. It is, instead, a political crisis brought on by the G.O.P.'s attempt to take the economy hostage."1 The Congressional 1%ers are manufacturing this crisis to pressure everyone else to extend the Bush tax cuts for the wealthy and accept painful cuts to Social Security, Medicare, and Medicaid.
- The Bush Tax Cuts Finally End December 31. If Congress does nothing, the ax will fall on all the Bush tax cuts on New Year's Eve.2 Then, on January 1, the public pressure on John Boehner and House Republicans to extend the middle-class tax cuts (already passed by the Senate and waiting to be signed by President Obama) will become irresistible.3 So the middle-class tax cut will eventually get renewed, and we'll have $823 billion more revenue from the top 2% to do great things with.4
- The Sequester. The sequester is another political creation, forced on the country by the Tea Party in Congress in exchange for lifting the debt ceiling last year to avoid crashing our economy.5 It's a set of cuts (50% to a bloated military budget and 50% to important domestic programs) designed to make both Republicans and Democrats hate it so much that they'd never let it happen.6 And the cuts can be reversed weeks or months into 2013 without causing damage.7
- The Big Three. Nothing happens to Social Security, Medicare, and Medicaid benefits on January 1—unless Tea Partiers and Congressional 1%ers force painful cuts to beneficiaries in exchange for tax increases on the wealthy, which are going to happen anyway if Congress does NOTHING.8 So, there's literally no reason benefits cuts should be part of the discussion right now.
- We Should Be Holding Wall Street Accountable. The real crisis at the center of our economic meltdown is the mess Wall Street left us. There are 16 million underwater homeowners in the United States, nearly 1/3rd of all homeowners in the country. They are joined by 7 million households in some stage of the foreclosure crisis. The fallout from the collapse of the financial industry built on shady loans and inflated housing prices shredded the job market and gave use the worst economy since the Great Depression. And still not one senior level banker has gone to jail. Americans want some accountability for the trillions we've spend in bailouts and the millions still left dealing with the consequences.
1. "Hawks and Hypocrites," The New York Times, November 11, 2012
2. "Bush-Era Tax Cuts," The New York Times, November 9, 2012
3. "Boehner Is Bluffing," Slate, November 9, 2012
4. "CBO: Ending High-Income Tax Cuts Would Save Almost $1 Trillion," Center on Budget and Policy Priorities, August 24, 2012
5. "The sequester, explained," The Washington Post, September 14, 2012
7. "Let's Not Make a Deal," The New York Times, November 8, 2012
8. "How the Across-the-Board Cuts in the Budget Control Act Will Work," Center on Budget and Policy Priorities, April 27, 2012
Hope you find this straight forward write up as handy as I did. Feel free to share. Original is here: http://www.campaignforfairsettlement.org/winning_the_fiscal_showdown