Posted on 11/17/2012 11:05:04 AM PST by Bratch
Everyone was chummy and hopeful about a deal at the White House today, but if you’re surprised to hear that some Democrats are intent on driving a very hard bargain, you must have missed the polling data last night. They promised their base a tax hike on the rich and they can make it happen by doing nothing, with voters primed to blame the GOP for the economic fallout. Under those circumstances, why not go cliff-diving?
[The Gang of Six] reconvened on Tuesday, but the election results presented a new set of problems. Republican officials familiar with the talks say Democrats dug in on demands for tax revenue that Republicans are not willing to meet. Democratic aides say Republicans who had spoken abstractly about the need for more revenues are balking at the specifics.
“Things change. It’s not just a matter of the numbers changing, and they do,” Mr. Durbin said of shifting deficit projections, revenue forecasts and spending totals. “It’s also a matter of the political environment, and the landscape changing.”
Democrats freely admit they have shifted their stance from the defensive crouch of the summer of 2011, when they signed on to a budget deal that cut $1 trillion in spending with no tax increases, to now, when they believe the voters have given them a mandate to raise taxes on the affluent…
Both sides insist they want a deal before January, but a rising chorus of voices, especially Democrats, say they would rather go over the cliff than accept a deal that raised too few taxes while extracting too many cuts, especially to Medicare and Medicaid.
That’s the state of entitlement reform in America 2012, two years after a Republican landslide and a VP nomination for Paul Ryan. Here’s the question: How many Republicans would also prefer to go over the fiscal cliff (briefly), not because it’ll help them get what they want but because it’ll arguably make things politically easier for them to let Democrats get what they want? What I mean is, if Republicans make a deal now to raise taxes on the rich in exchange for deep spending cuts — even if they insist on limiting the rate hikes to millionaires only — they’ll be hammered by the conservative base for selling out. But if they go over the cliff and let the Bush tax cuts lapse, then agree with Obama to extend the old, lower rates for the middle class only, they can claim that (a) they didn’t blink under the pressure of the deadline bearing down on them and (b) technically speaking, they’re not responsible for the new, higher tax rates on the rich. In this post-cliff scenario, the new tax hike on the wealthy happens automatically, without any Republicans voting for it; the only vote Republicans would take would be to lower taxes, albeit only on the middle class. In practice, you’re getting the same outcome as you would if they made a deal now to reinstate the Clinton-era rates for high earners (plus, er, the initial fiscal shockwave from going over the cliff and the chaos afterward in trying to apply the lower middle-class rates retroactively), but in theory it’d be easier to sell politically because the House GOP would have avoided casting any votes affirmatively for new taxes.
Is that sort of posturing valuable enough to them to warrant going over the cliff, or is it just too risky given the likelihood of a new cliff-driven recession and the blame Republicans might get when it happens?
Oh, in case you’re wondering, here’s Boehner’s plan to make sure the government remains disciplined in tightening its belt if a deal is reached:
According to a Boehner aide, the speaker suggested that the leaders agree on long-term revenue targets for tax reform and spending targets for entitlement reform, as well as enforcement mechanisms that would kick in if Congress fails to act on either next year.
Sounds like part of the solution to the bind that the sequester’s left them in is … another sequester.
ALL Dems - especially Obama - WANT to “go over a fiscal cliff.”
That is, traditionally, how a social revolution is fomented and absolute government power generated.
A hundred years after Lenin, our backward-looking president and his congress are seeking to model the nation after Russia in 1918.
The Dems have a fixation on tax increases for the “rich”. Their position makes little real difference financially, it is an ideological point on which they will not budge. They are holding the country hostage, and are ready to inflict damage to the US economy and our national security just to sate their sacrificial soak the rich fetish.
Firmly affix blame for the impasse, the overspending, and the created crisis, to the Democrats, walk them to the edge of the cliff, and throw them off.
All the pubs have to do is bring a bill to the floor that gives Bozo his taxes on the rich and leaves the rest of the current rates in place. The pubs all abstain from voting in the House and Senate and pin this one on the dims.
Then away we go! (We’re toast anyway.)
The media is now fixated on an apparently new feature dominating the economic landscape: a “fiscal cliff” from which the United States will fall in January 2013. It’s not because we will go over the cliff that will lead to America’s financial ruin, but because we won’t go over it. The real fiscal cliff comes when our creditors want their money back, and we don’t have it. The only way around this is to stop the presses, let interest rates go up, and they’re going to have to go way up, and let the chips fall where they may. QE3 can only take us so far and the Federal Reserve’s money printing will do so much destruction to the dollar through inflation, that we’ll see a currency collapse like never before. On the current trajectory the national debt will likely hit $20 trillion in a few years. If by that time interest rates were to return to some semblance of historic normalcy, say 5 per cent, interest payments on the debt would then run $1 trillion per year. This sum could represent almost 40 per cent of total federal revenues in 2012. In addition to making the debt service unmanageable, higher rates would depress economic activity, thereby slowing tax collection and requiring increased government spending. This would increase the budget deficits further, putting even more upward pressure on interest rates. Higher mortgage rates and increased unemployment will put renewed downward pressure on home prices, perhaps leading to another large wave of foreclosures. My guess is that losses on government insured mortgages alone could add several hundred billion more to annual budget deficits. When all of these factors are taken into account, I believe that annual budget deficits could quickly approach, and exceed, $3 trillion. All this could be in the cards if interest rates were to approach a modest five per cent.
We went off that cliff a long time ago. Now we are trying to figure out if we want to land in a field of razor blades or a field of land mines.
secession
Agreed. This whole 'fiscal cliff' business is what our Congress and President agreed to back in August 2011. The GOP House passed it. The Dem Senate passed it. And the Dem President signed it. Make them honor what they said they would do back then. I fear though that Boehner will cave and the Dems will continue spending as usual with no cuts.
Obama wants to bring down this country. He is drooling over this happening. Communists know the best way to take over a country is when the people are pissed off.
Dems are bluffing, if the populace sees how little they are personally affected by across-the-board budget cuts then the Dems lose their power base.
Congressional Democrats: We're Fine Going Over The Fiscal Cliff and Plunging the Nation Into Recession
There are two possibilities here. Both may be true.
The Democrats may simply be posturing in order to wring a complete victory in negotiations. By threatening to take the country over the fiscal cliff, and seeming to mean it, they will force Republicans -- whose allegiance is to the nation, and not the progressive ideology -- to stop them by giving them everything they want.
The other possibility is that they're not just posturing and that they do mean it. Charles Krauthammer has been talking about this -- the Democrats know that to finance their ever growing welfare state they will have to tax the middle class. What better way to do it than to take us over the fiscal cliff (automatically raising income taxes on the middle class) and simply say "The Republicans did it, they wouldn't compromise?"
The other part of it, the automatic sequestration part, is likewise something they desire. Deep slashes to the military without having to vote for it? There are also cuts to Medicare, of course, but the Democrats are moving away from the old vote and besides, lots and lots of old people will continue voting for Democrats no matter how much they cut from Medicare (as they proved this last election).
And there's one more thing: We're going to have a recession, with the fiscal cliff or without it. It's better for Obama and the Democrats to have a recession that they can claim "was all because of Republicans" rather than one which is plainly owned by Obama.
All in all, the Democrats have arranged to win on all their spending and taxing objectives, and all they have to do is nothing. They just need to claim "We tried to compromise but the Republicans wouldn't let us compromise with them."
So which is it? Posturing or plan?
Both sides insist they want a deal before January, but a rising chorus of voices, especially Democrats, say they would rather go over the cliff than accept a deal that raised too few taxes while extracting too many cuts, especially to Medicare and Medicaid.The only problem with this is if the media makes a mighty noise about Democrats' willingness to destroy the country in pursuit of ideological objectives.
What do you imagine the odds of that are?
Obama is now in control of the behemoth bureaucracy. He has some support from some states, and the large cities but that is about it. He will see this as his chance to go after those areas that don't support him or could pose a problem. Of course it will be economic in nature initially. That all begs the question, how will they keep and maintain power if the entire system goes bankrupt and the productive class in essence goes Galt or on the welfare rolls. There power base will be brought down in short order leaving a vacuum unless they get help from the outside like Russia or China. However the only helping I see from those 2 is how they are going to carve us up as spoils of war.
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