9 reasons why America might go over the fiscal cliff

Amrican Enterprise Institute ^ | November 20, 2012 | James Pethokoukis

[ExxonPatrolUs]

Veteran political analyst Pete Davis offers up a list of possible impediments to a deal on avoiding the fiscal cliff:

1. President Obama insists on a tax rate increase on those earning $250,000 or more, and House Republicans balk;

2. President Obama and Democrats refuse to accept revenue increases that won’t be scored by CBO, i.e. that depend upon tax reform and/or upon an assumed increase in economic growth;

3. President Obama insists on a Making Work Pay tax credit to replace the lost 2% payroll tax cut for working Americans that Republicans won’t accept;

4. House Republicans insist on entitlement cuts that Senate Democrats won’t accept. Certainly, Senate Democrats see Social Security as completely off the table, and Medicare cuts will be difficult to achieve because most of the easier cuts were used to pay for ObamaCare;

5. Everyone wants to repeal the $109 b. sequester, but Republicans may object if it’s not “paid for;”

6. Democrats want bigger defense cuts than Republicans will accept;

7. Discretionary spending can be shaved a bit more, but not much more without incurring Democratic opposition;

8. Republicans may refuse to accept a debt limit increase that is not “paid for.” A one-year hike would cost about $1.2 tr. There’s no way they could pay for that.

So what’s Davis’s best guess on what happens?

– 60% chance nothing happens, and we go over the cliff in January;

– 40% chance of a modest, pre-Christmas “downpayment” deal “with procedures to deliver tax and entitlement reform … expect to be underwhelmed.” And if he were to offer a 9th impediment, it would be this:

One big final impediment will remain after a deal is announced — The House may not pass it. In July, 2011, House Speaker John Boehner (R-OH) thought he had agreed to a deal with President Obama which his colleagues would support, but House Republicans rejected it. He was put in the embarrassing position of having to return to the bargaining table to cut a smaller, kick the can down the road deal, with the Super Committee that failed, and the $109 b. sequester that no one wants. I’m sure he’ll be a lot more careful this time around to whip his support before finally signing off on a deal. Anything the House Republican Caucus will pass is unlikely to attract more than a handful of Democratic votes, even if President Obama supports it. Boehner will not get united House Republican support for any deal. He may need Democratic votes to pass it, and Nancy Pelosi (D-CA) is unlikely to supply them. That’s the problem.

[hope_dies_last]

All we need is one.... Obamanation

[PieterCasparzen]

Can the media stop saying “cliff” for their masters ?

Many people understand that there is only one budgetary problem the government has: overspending.

Specifically to government employee cost and vendor payments and giveaway programs to working-age freeloaders.

The taxes received that are supposed to pay for those things (i.e., NOT SS/MED withholdings, but FIT) are nowhere near enough to pay for them.

[SIDENET]

We're going over the cliff by design (Cloward Piven).

And when the GOP demands fiscal cuts? What will we get?

Cuts in entitlements? Cuts in BS unionized federal pukes riding the gravy train?

Nope. The cuts will be MILITARY and defense spending (preferably in red states, of course).

Then the DNC will hang that around the necks of the GOP fools and tell them that they "gave them the cuts they wanted".

[genghis]

from my perspective
fiscal cliff is our best case scenario.
It is impossible to imagine johnny b negotiating anything better.

[Tzimisce]

1) Liberal Democrats are in charge.
2) Liberal Democrats are in charge.
3) Liberal Democrats are in charge.
4) Liberal Democrats are in charge.
5) Liberal Democrats are in charge.
6) Liberal Democrats are in charge.
7) Liberal Democrats are in charge.
8) Liberal Democrats are in charge.
9) Sucks to be you.

[CMailBag]

[AlexW]

I would like to see a poll of FReepers.
How many think the USA will be the USSA, and/or fail.
Since I bailed out long before Obumbo’s imaculation, it affects me only when Social Security fails.

[monocle]

I would not accept any agreement that does not provide for a 10% cut in the federal payroll.

[ALPAPilot]

It seems like there are only four distinct possibilities: (all bad?)

a) We keep borrowing 1.2 Trillion every year.

b) Raise revenue thereby take money out of the private economy.

c) Cut government spending and take money from those at the trough. (My personal favorite, but the defense industry doesn’t seem to like it.)

d) Print a whole lot of money and have inflation pay for it all.

Which option is not a fiscal cliff (at least by the common definition)

[databoss]

Give Obama and the dems everything they want...then hang the bad economy around their necks like the giant ticking debt clock that criminal rapper wears...