The “Fiscal Cliff” is the Media’s Latest Bogeyman
Fear sells, I guess. The American media certainly rely on it to build audiences. They’re always frightening the public with some terrible bogeyman. Sex still sells better of course, as you can tell from the brouhaha over Paula Broadwell and that silly Jill Kelley and her twin sister Natalie and their carrying-on with those big shot generals. But fear does a pretty good job of attracting television viewers. The latest bogeyman is the “fiscal cliff.” According to the grim-faced lady on the TV this morning, we are all going to be in deep trouble come January 1 because those Washington types can’t agree on the best way to rein in the national debt.
You see, there’s this stand-off between the Republicans and the Democrats. The Democrats want the richest Americans, who have prospered mightily over the past 30 years, to chip in. The Republicans want the wage slaves, the old, the sick and the poor to pay the whole shot.
Naturally, President Obama isn’t buying the Republican plan. The deadlock has dragged on for a while, and caused a crisis last summer when Congress refused to approve money to pay the nation’s outstanding bills. Tea Party members of the House relented only after a bipartisan committee was appointed to work out a deficit reducing plan. But when the plan emerged, Congress wouldn’t accept it. That triggered an automatic cost-cutting mechanism, which was part of the debt ceiling agreement.
The cuts are so drastic that even Tea Party types are scared. And the fat cats who fund the Republican Party would be hit hardest. While Social Security, federal pensions and veterans’ benefits are exempt, for example, the military-industrial complex would take a massive budget cut – and that’s one of the most sacred of Republican sacred cows.
I don’t see the Democrats blinking first even though a lot of Democratic supporters would be hurt, too. Middle class taxpayers stand to lose at least part of their child care and mortgage interest deductions, for example.
Also looming are expiration of the Bush tax cuts, extended unemployment benefits and payroll tax reductions – and a temporary debt ceiling provision. How’s that for a triple-whammy?
The bottom line is that just about everybody would feel a whole lot of pain. The Congressional Budget Office warns that a ham-handed assault on the deficit would likely cause another recession next year.
If Washington lets that happen, I don’t see many elected politicians keeping their seats in 2014, do you?
So you can be reasonably certain it won’t.
Now, one of the lucky pols who don’t have to face voters in 2014 – or ever again – is President Obama.
All he has to do is let the Bush tax cuts expire, let the debt ceiling agreement bite, let the public raise hell. Then he can offer the Republicans a way to save their skins: reinstate the Bush tax cuts but only on the first $250,000 of a couple’s income. In return, he could loosen the purse strings for the Republicans’ pals in the military. If I were the president, I would also make sure that the middle class gets its IRS deductions back. And I would end the nonsensical provision that lets hedge fund millionaires pay a super-low income tax rate on their income. I would also try for a further extension of unemployment benefits until the job market improves some more.
With luck, a long-term deal would be worked out later to simplify the tax code, to reducing some rates in exchange for closing the egregious “loopholes” that let so many corporations pay no income taxes and people like Mitt Romney pay a lower rate than the workers they enjoy firing.