Skip to comments.Looming Threats No Match for Partisan Politics
Posted on 12/19/2012 5:34:25 PM PST by whitedog57
Sixteen months ago, partisan politics allowed the once-unthinkable to happen -- Standard & Poor's downgraded the U.S. credit rating after repeated warnings that the unprecedented move was forthcoming if elected officials didn't get their act together.
Apparently no looming threat is big enough or frightening enough to break the partisan logjam that seems to fuel the Washington, D.C., political cycle.
The consensus among non-partisan observers is that this latest round of political theater will almost certainly result in another Band-Aid, a temporary fix that will stave off the worst of the potential economic fallout while providing maximum political cover for elected officials eyeing re-election.
"It is a tough predicament for both sides. Obama was elected on the promise of sticking it to the rich and (Republican Speaker of the House John) Boehner was promising 'No new taxes,'" said Anthony Sanders, professor of finance at George Mason University. "Neither side really wants a middle ground, but Boehner is more likely to capitulate. After all, who gets elected to Congress by cutting entitlements?" Sanders asked, rhetorically.
In other words, political considerations will take precedence over the long-term health of the economy, and the cycle will start all over again.
On Tuesday Boehner signaled his willingness to raise taxes on those making more than $1 million a year. Despite the fact that, according to Boehner's office, such a tax increase would not impact 99.81% of tax payers, the compromise was met with immediate howls of rejection by the staunch anti-tax wing of the Speaker's party. President Obama, meanwhile, had earlier raised his ceiling from $250,000 to $400,000 for those for whom he would allow the Bush-era tax cuts to expire, drawing criticism from liberal members of his party.
(Excerpt) Read more at foxbusiness.com ...