Well, the agenda media is tripping over itself speculating on how Congress and the President will avoid the fiscal cliff, and what the ramifications are if they do (or don’t).
An on-line AP article today makes some of the most ludicrous statements and assertions I’ve seen in a while, illustrating the fact that they haven’t got a clue as to what’s going to happen — or why.
President Barack Obama and leaders of the lame-duck Congress may be just weeks away from shaking hands on a deal to avert the dreaded “fiscal cliff.” So it’s natural to wonder: If they announce a bipartisan package promising to curb mushrooming federal deficits, will it be real?
Come on, now — this is Washington D.C. where perception is reality, and the MSM is all about creating perception.
Obama and top lawmakers could produce an agreement that takes a serious bite out of the government’s growing $16 trillion pile of debt and puts it on a true downward trajectory.
On what planet could (or would) they do that? Certainly not this one. Even during the Clinton administration when the budget was supposedly “balanced”, the debt never went down year on year. If they taxed the top 2% at 100%, they couldn’t even erase the current deficit, much less “take a serious bite” out of the debt.
Or they might reach an accord heading off massive tax increases and spending cuts that begin to bite in January — that’s the fiscal cliff — while appearing to be getting tough on deficits through painful savings deferred until years from now, when their successors might revoke or dilute them.
Now that sounds more like what we’re accustomed to from our political class.
Historically, Congress and presidents have proven themselves capable of either.
Not recently. Since 1961 the debt has done nothing but increase. In all fairness, the biggest jumps came during the administrations of Ronald Reagan ($2 trillion) and George W. Bush ($5 trillion). But Obama has already exceeded Bush’s total and is likely to exceed that combined $7 trillion well before the midpoint of his second term.
Passing a framework next month that sets deficit-cutting targets for each of the next 10 years would be seen as a sign of seriousness. But look for specifics. An agreement will have a greater chance of actually reducing deficits if it details how the savings would be divided between revenue increases and cuts in federal programs, averting future fights among lawmakers over that question.
Say what? Can anyone read that and not laugh?
Better yet would be including a fast-track process for passing next year’s tax and spending bills if they meet the savings targets so they can whisk through Congress without the possibility of a Senate filibuster, in which 41 of the 100 senators could kill a measure they dislike.
Is that the same Senate that hasn’t passed a budget in 3-1/2 years?
Raising money from higher rates, closing loopholes or a combination of the two would create real revenue for the government.
As opposed to what? Fake revenue?
The problem is many tax deductions and credits , such as for home mortgages and the value of employer-provided health insurance, are so popular that enacting them into law over objections from the public and lobbyists would be extremely difficult.
With the price tags of tax and spending laws typically measured over a decade, delaying the implementation date can distort the projected impact of a change on people and the government’s debt.
But it does give the perception that they’re doing something.
Even more questionable are assumptions that overhauling tax laws will boost economic activity and thus produce large new revenues for the government. Many Republicans and ideologically conservative economists contend that’s the case, but most economists say there is no sound way to estimate how much revenue can be generated from strengthening the economy by revamping the tax system. Many believe the amount is modest.
Well then, we are just fluked!
Savings that come from weeding out waste, fraud and abuse, which sounds good but are difficult to find, or rely on one-time sales of federal assets should be treated with suspicion.
Of course — there’s no waste, fraud or abuse in the federal budget.
Deep cuts that take effect in the future, say after Obama leaves office in 2017, might be better than imposing them now and hurting an already weak economy by reducing spending.
Now were talkin’