The GOP Congress destruction of America can be prevented by Democrats by going off the Cliff in January and force conservatives to lower tax cuts on middle class while not cutting taxes on the 1%
BY ROBERT LOVE
"Most Republicans in Congress are doing everything in their power to prevent President Obama from winning a second term.
To accomplish their political objective, they are derailing our economy in the hopes that the American people will hire Mitt Romney to clean up their mess. It is a shame that Congress is hurting the country in order to prevent a President from succeeding. We can talk all we want about how pathetic the Republican Party is right now, but make no mistake: our economy is in for a lot of pain if Congress can’t work out a deal on these issues.
The fiscal cliff is a set of spending cuts and tax increases set to take effect on January 1, unless Congress acts. According to CNN Money:
The phrase [fiscal cliff] was coined by Federal Reserve Chairman Ben Bernanke to describe the simultaneous onset of tax increases and spending cuts that will be triggered on Jan. 1 unless Congress acts.
Combined the policies would take $7 trillion out of the economy over 10 years — about $500 billion of which would occur in 2013.
Such measures include the expiration of the Bush tax cuts, middle class protection from the Alternative Minimum Tax, and more than 50 “temporary” tax breaks for individuals and businesses that have been on the books for years. They also include nearly $1 trillion in blunt spending cuts across many areas of the federal budget. These include significant bites out of defense and non-defense spending. A number of stimulus measures — such as the payroll tax cut and extended unemployment benefits — will also be ending.
Economists believe that this will send the American economy into another recession. According to the Washington Post:
A new report commissioned by the aerospace industry says federal budget cuts set to take effect in January could cost the country’s economy more than 2 million jobs and raise the national unemployment rate by 1.5 percentage points over the next year.
“The results are bleak but clear-cut,” said Stephen S. Fuller, the George Mason University professor who wrote the report. “The unemployment rate will climb above 9 percent, pushing the economy toward recession and reducing projected growth in 2013 by two-thirds.”
The biggest problem preventing a deal from getting done is the fact that virtually all of the Republicans in Congress have signed Grover Norquist’s pledge not to raise taxes — especially on the wealthiest 2% who continue to enjoy unprecedented low tax rates to the detriment of our economy. It doesn’t appear that any of them are likely to stand up to Norquist anytime soon. I thought the Republican Party was supposed to be tough? How is it that the balls of the entire Party are in the hands of one man? Senator Dick Durbin (D-IL.) said this of Norquist and his pledge:
“It’s a disservice to our nation for someone to be allowed to set a standard which really could threaten our economy. I’ve grown up in life with bullies, and there’s a point that you just have to say, `I’m not going to be frightened by them anymore.’”
Democrats believe they have found a way around this pledge. The Bush era tax cuts, like many of the Democrats’ stimulus programs, were designed to be temporary. That is why they are set to expire on January 1. If the tax rates –particularly for the wealthiest 2%– naturally go back up, Republicans could sign off on a tax cut in a deal with the Democrats. This technically wouldn’t violate their pledge, since they wouldn’t be voting for a tax increase. Norquist, naturally, is upset with the idea. He said the idea “doesn’t pass the laugh test.”
Off a Cliff: The Democrats’ Thelma & Louise opportunity
Democrats, however, seem prepared to let that happen in order to finally break through Republican obstructionism in Congress. A growing number of Democrats are more than willing to let the Bush tax cuts expire in order to force the Republican to vote for a compromise.
Their goal is to raise taxes on the wealthiest 2% of Americans. This would still be a tax cut for the top 2% also. Their first $250,000 in income would not be taxed but their overall tax rate would be raised closer to what it was under President Bill Clinton. Senator Patty Murray (D-WA) laid out the Democratic position this week:
“Millions of jobs could be lost through the automatic cuts, programs families depend on would be slashed irresponsibly across the board, and middle-class tax cuts would expire. And once again, if Republicans won’t work with us on a balanced approach, we are not going to get a deal… if we can’t get a good deal—a balanced deal that calls on the wealthy to pay their fair share—then I will absolutely continue this debate into 2013, rather than lock in a long-term deal this year that throws middle-class families under the bus.”
There is a way out of this problem. President Obama and Speaker Boehner had agreed to a plan to raise the debt ceiling last year that included $800 billion in new revenues with $2.4 trillion in spending cuts over ten years. The talks broke down when Speaker Boehner walked away from the deal after Senate Democrats called for $1.2 trillion in new revenues (without raising any tax rates). President Obama explained the deal and how the talks broke down:
President Obama, even though his party controlled the Senate, was willing to give the Republicans a deal that included $2 in spending cuts for every $1 in new revenues. The Republicans walked away. That is why the Democrats are holding firm on the Fscal Cliff. MSNBC contributor Ezra Klein pointed out that the hard-line tactics are not just about this particular deal:
“One thing Democrats are thinking about here isn’t just this fiscal cliff and this tax deal, it’s that they need to break the Republicans’ brinkmanship altogether. Democrats believe at this point they need to show the Republicans that they can’t keep threatening to drive the country off of these various kinds of cliffs.“
Whatever your may think about the fairness of our tax situation, our national debt, or the legitimacy of the Democratic and Republican arguments, there is one thing we should all agree on: the full faith and credit of the United States should not be held hostage under any circumstances. In order to break the Republican stalemate and their obstructionist tactics the Democratic Party must unite and be willing to go off the Fiscal Cliff rather than allow the GOP to continue opposing every piece of legislation in order to protect the wealthiest 2%.
Breaking the Republican’s pledge to Grover Norquist is just icing on the cake."