|The Fiscal Cliff (actual size)|
“I think we’re going over the cliff. It’s pretty clear to me they made a political calculation,” said [Sen. Lindsey] Graham on CBS’s “Face the Nation,” dismissing the initial White House proposal to help the nation avoid the looming “fiscal cliff” of automatic spending cuts and tax rate rises.
“This offer doesn’t remotely deal with entitlement reform in a way to save Medicare, Medicaid and Social Security from imminent bankruptcy. It raises $1.6 trillion on job creators that will destroy the economy and there are no spending controls,” he added.As is usually the case when Congress takes up dealmaking, the best possible thing that can happen is nothing. Obama wants to raise a bunch of taxes, with $200 billion in stimulus spending that would immediately eliminate any fiscal benefit the nation would accrue by raising taxes.* Boehner's plan is even worse, and not just because it eliminates the spending cuts the GOP got for raising the debt ceiling last year,** the only good that came out of that whole sorry spectacle.
While the Dems' plan is theft, at least they have the guts to rob you to your face. The GOP plan is burglary that relies not on changes in tax rates to raise money, but primarily on changes in the definition of inflation.*** They want to change the way inflation is calculated to accomplish two things: to reduce inflation-adjusted payouts, and to reduce inflation-adjusted tax-bracket adjustments. Your taxes will not be raised, they claim, you'll just pay more in taxes because more of your earnings will fall into a higher tax bracket. Still, over 10 years, the plan would reduce the deficit by $2.2 trillion. That's $220 billion dollars a year, a whopping 15% of the present deficit. Even if the GOP got every lying thing they asked for, we would still have 85% of our 100% unsustainable deficit to keep us warm at night.
Neither party wants to deal with the real problem, which means that if there's one thing both parties agree on (and will therefore agree to do) it's to cover the problem up. Therefore the best thing that can happen is what neither party really wants: go over the cliff, take the actual cuts that were promised and let the temporary tax cuts expire. Then both parties can focus on the most important issue: blaming the opposition for the economic malaise both parties are working so hard to perpetuate.
* Proving once and for all that the Democrats' desire to raise taxes on the rich is not about deficits but about punishment.
** Boehner's plan is the political equivalent of France reminding the press that they were actually on the winning side of WWII, then immediately surrendering to Germany again because they don't know what else to do.
*** They are not reducing inflation, they are merely lying about it more purposefully.