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Friday, October 28, 2016

Before President Obama left town on the Friday before Christmas, he urged members of Congress to sip some eggnog and relax over the holiday. Speaker Boehner might be in need of some liquid courage after a disastrous attempt to pass to avert the “Fiscal Cliff” with what he called “Plan B” went down in flames after right-wing groups like FreedomWorks and the Club for Growth nixed his plan.

As negotiations resume Wednesday to avert a series of automatic spending cuts and tax breaks expiring, Bill McBride of Calculated Risk adds some much-needed perspective to a situation that was created by a Republican Party commitment to the completely contrary goals of reducing the deficit and never, ever raising taxes:

A few obvious points on the “fiscal cliff”: 1) It is about the deficit shrinking too quickly next year, 2) there is no “drop dead” date and an agreement in early January still seems likely (the sites and TV stations with countdown times are embarrassing themselves), and 3) entitlements are not part of the “cliff” (although it was possible some changes might be part of an agreement).

While the sequestration President Obama and Speaker Boehner agreed on in 2011 to avert the manufactured debt limit crisis will include $11 billion in Medicare cuts along with billions in defense and other cuts, it would not change any benefits that beneficiaries of the program receive. But there’s no doubt that if the whole of cuts and tax breaks ending in the fiscal cliff are allowed to come into being — cutting the deficit in half — they would eventually damage our already-shaky economy, despite the fact that right-wingers have been claiming for years that the deficit was to blame for our slow recovery. And if Republicans want to hold the debt limit — which expires early in 2011 — hostage again, a fiscal crisis could be inevitable.

So something has to be done. But what? Here are five possible resolutions to this completely unnecessary drama:

1. The snooze bar.
Unable to resolve anything but unwilling to take the heat of the markets punishing inaction, Congress passes a bill that simply delays the sequestration, continues all the Bush tax cuts and raises the debt limit for around three months. Then the president signs it. This would be a huge win in general for Republicans who are desperate to avoid the president going into his inauguration and State of the Union prepared to lambast the GOP for refusing to compromise. They would love to delay a deal and hope the goodwill the president won with his re-election fades.

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Copyright 2012 The National Memo
  • At this point, the best thing may be to let the temporary Bush tax cuts expire, and let the spending reductions imposed by the GOP as a condition to raise the debt ceiling over a year ago go into effect. Let the clowns scramble after the fact. I don’t think finger pointing is going to impress anyone.
    Hopefully common sense will prevail and a compromise will be reached on the revenue issue before the end of the year, regardless of what the Tea Party obstructionists promised Norquist. Resolution of the spending reduction issue is going to take time. I expect both sides to agree on a temporary suspension and a delay on the implementation of the latter.
    The problem is not that our politicians are incompetent, the problem is that they are too afraid to offend their constituencies and be voted out of office.

    • old_blu

      I think that is exactly what is going to happen they are going to agree on some sort of temporary extension, and the Republicans are going to hold America hostage on the debt limit just like they did last time.

      Personally I would rather they just let us go over, and President Obama stands his ground, but I’m a realist I know he is going to have to make some concessions.

      • Things are likely to get worse in a couple of months when the next debate over raising the national debt ceiling takes place. The people that did not hesitate to raise it 18 times when Reagan was in office and 8 times when Bush II was in office will go into a frenzy at the thought of having to do it for a second time during the Obama presidency.
        Calls for unspecified spending reductions, with a special focus on the social programs Republicans love to hate, will reach a crescendo and don’t be surprised if some Democrats cave in.
        Unfortunately, pragmatism and courage are anathema to politics. Our elected officials, who are well aware of what needs to be done, will throw their own mothers under a bus before risking losing their jobs. Let’s not forget what W said when he was asked to reflect on his presidency: What he liked the most was the fame and the feeling of power…

        • sigrid28

          Another argument for going over the Fiscal Cliff and enduring the resultant uncertainty is that all of the spending cuts put in limbo by falling over the cliff with revenue increases can STILL be in play as chips to throw out during the Fight at OK Corral over the debt ceiling (but don’t tell the Republicans that). If obstinate Republicans and their constituents hated some of these spending cuts before pushing them over the cliff, they probably will still hate them afterward (we know how good they are at hating things). Let them accept a concession on spending cuts they hate if they still insist on holding the debt ceiling hostage. It is entirely possible that they still haven’t figured out how to defend the good credit of the United States–or refuse to. If they insist on acting like children who will not behave unless they fear a phony Christmas morning disappointment (not even a punishment is required they are so fearful), like a coal in their stocking, spending cuts they abhor about to go into effect may be needed to ensure the best outcome for the rest of us. Talk about childish: parents who have just gotten through the intricacy of Christmas negotiations with their children know and even the little darlings know, that eventually they will grow up. As for these Republicans in the Congress, I’m not so sure.

    • neeceoooo

      But that fear of offending their constituencies could come around and bite them on the butt and still result in us voting them out of office.

    • idamag

      Dominick, That is what I say. If you are being blackmailed, the best way to stop it is to let the truth out. If we let the bush tax cuts expire, the tea party and their godfather will no longer have any leverage.

    • Easy for you to say let the cuts go into effect. Obviously you have a job and are noy on unemployment.

  • Lets roll down the curb or off the cliff, don’t touch Social Scurity, at least the tax breaks will go away.We can start a new year with the no no voters.

  • Gambler2

    I think option number four is the one that is best for the country in the long run. The Bush tax cuts will expire, which will be a good thing. Then let us see if the Republicans have the courage to oppose a tax cut for the poor and middle class.

  • montanabill

    Interesting. We know spending is the real problem, but to cut spending will gore someone’s ox. We also know that raising taxes on the top 1 or 2% is equivalent to p ing into wind, but that was a big part of the President’s demagoguery to get re-elected. The President has a grand bargain to raise his infamous taxes on those ‘not paying their fair share’ while having an ‘outline for future spending cuts’. I think we have seen that scenario before a couple of times. How about just simply cutting some real spending on every single government program?

    • Anthony_JK long as we exempt defense and prisons and we arm every teacher??

      I’ll take Option #4, with the new Dem Senate passing the original $250K cut, trading sequestering for not touching Social Security, Medicare and extending UI benefits, and a permanent solution that ends the debt ceiling drama. If the new House disagrees, then prepare the $3T platinum coins for Option #5 and let the GOTP consume themselves in their own fascist hate.

      • johninPCFL

        “revenue bills shall originate in the House”. The Senate can’t propose changing tax rates, so all they can do is change spending.

        • Anthony_JK

          True, but the Senate can take a revenue bill originating in the House, graft their policies into it, and then rely on a House/Senate conference to reconcile differences.

          • johninPCFL

            True. But given the nature of the GOP in the Senate with regard to the filibuster, the bills that have passed the House would require years of votes on amendments to pass.

            That is likely Boehner’s strategy. He knows that the Senate can’t originate a bill (but most citizens don’t), so when they don’t, he gets airtime chanting to the mass of the uninformed about how the Senate “won’t take any action”. If they’re debating a House bill, he gets to stand on the sidelines and chant “just pass it” while his cohorts are blocking every amendment.

      • montanabill

        Your words on the exemptions, not mine. I’m afraid your option won’t begin to solve the problem, it simply makes it worse and does little to postpone the inevitable. It is really just a math problem. I’m afraid you also don’t understand what fascism is either. No doubt a disservice by our school system.

        • Anthony_JK

          Because only socialism is fascism, right?? Never mind that both Hitler and Mussolini were staunch anticommunists and fundamentalists who killed Leftists with the same fervor that they attacked Jews and homosexuals??

          But, I guess that simply privatizing social spending and cutting wages to the bone will unleash the power of true lassiez faire capitalism, ‘ya think?? Like it did so well during the Reagan years….oh, wait, it didn’t!!

          Go troll your supply-side snake oil someplace else…it’s been exposed.

          • montanabill

            Look up the definition of fascism and its political tenants.

    • oldtack

      Because it makes too much common sense Bill. Surely at your stage in life you know that for many years our government has been bereft of common sense.

  • Pamby50

    I don’t think the Republicans in the house are going to vote on anything this year. It won’t matter what the President offers. Their answer to everything is no. So if anything does get done this year, it will be with an all Democratic & some Republican vote.

  • How can the writer say most of the people wont notice when no deal cuts off extended unemployment benefits to millions of jobless people

  • DoctorFaustroll

    I think some major network needs to have a special on Fiscal Cliff Diving to make everyone feel better about this nonsense. If the Republicans are stupid enough to turn the country into a one party system, we could do worse than having Obama leading that party.

  • onedonewong

    Boehner needs to let barak get his way on the tax increases and then when we are out of money to borrow at the end of February, leave the debt ceiling as is and let Barak propose all the spending cuts. Time to make a man out of the little boy in the WH

    • Anthony_JK

      And what do you propose when that “little boy” breaks out the $3 trillion platinum coin and says, “Problem solved”??? And, let those most pushing to cut propose their own cuts.

      • onedonewong

        The boy wonder only knows how to spend. the republicans should let him have his way on taxes and let him figure out how to balance the budget. Bet he’ll end unemployment payments for 2 years, rebuilding mosques with tax dollars, providing illegals with benefits.

        • Anthony_JK

          Actually, the “boy wonder” has spent less in 4 years than Dubya spent in ONE year. And, at least he’s PAID for his spending, which is more than I can say for Dubya, who carried two wars, Medicare Advantage and his wealthy tax cuts off the budget. Also..isn’t it more Republicans who are more dependent on said “illegals” to wet nurse their kids and mow their lawns??

          • onedonewong

            HUH???? don’t they teach math in your part of the country?? Its obvious that its a lost on you. He paid for his spending how by borrowing from China???/
            No the illegals on welfare are the dem’s base those 8-10 million votes keep them in office

  • dsand1445

    Boehner is an ineffective speaker he can’t get the votes from his own party. He seems to care more about keeping the job as speaker than he care about the country. The republicans think that the President will get the blame if no deal is made. News Flash that’s not going to happen. The GOP in known for being obstructionist for the last 5 years. One would think after all this time ,lies and money spent trying to bring this President down have not worked and will not work. When you lose you have to compromise

  • KEEPING IT THOUGHTFULLY HONEST: So let’s go “Over their Cliff” that all of politicians agreed to set up a few months ago! Cut everything since most of it has benefited a few special interests, not Middle Class Americans taxpayer that paid for most of it! So Boehner where are the JOBS as you asked during the Romney campaign? It is the responsibility of our National Press News to accurately on this “political hostage” issue? FACTCHECK who is conducting the republican clown show in House of Reps.? Publicly name each clown! Everyone is entitled to its own opinions but its own facts! But our Free Press and News needs to responsibly remind everyone including Boehner and his republican clowns of the results of this election. So where are the negotiations on the election issue of Government stimulus funding to facilitate more American new jobs growth for the middle class? THE INCONVENIENT TRUTH: The republican’s election issue of 10 years of the continued Bush tax cuts for billionaires and millionaires that significantly contributed to our national debt and created new jobs in Communist China lost! Fiscal Responsible Debt Reduction is secondary. The Ryan Plan was defeated- No voucher or cuts for Medicare and leave Social Security alone for now! This is not rocket science! That’s it! The National Press stop trying to be politically correct, but responsibly call out the republicans that their “hostage taking obstruction” to undermine our economy and intransigence’s on their unacceptable defeated policies will put them out of the political business! America’s middle Class is fed up with you irresponsible idiots with their years of class war on the American Middle Class! The majority of Americans have spoken so deal with the new reality! So where are the jobs?