American Financial Politics: Hold on Tight – Cliff Ahead!
Those who have been paying attention to America’s politics over the past more than one month since the presidential election have heard the cringe-worthy term “Fiscal Cliff” more than any of us would have thought possible. After all, President Obama won both the majority of the popular vote and the Electoral College — so some of us would like to see his win as a mandate in terms of what his second term agenda should include and, for that matte, how ‘liberal’ or centrist his agenda will be. But here is the reality check: politics in Washington did not change with the election’s results.
What have we seen take place in response to this ‘fiscal cliff’ – the inaccurately named doomsday situation in which all Americans taxes are scheduled to increase at the turn of the new year, and across-the-board cuts will occur to the nation’s budget if a deal isn’t negotiated over the next several days? Here’s what we have:
- The White House is using its leverage. With the support of the majority of taxpayers, President Obama has moved forward under the premise that while spending cuts need to take place to fix the nation’s gargantuan deficit, revenue increases are not debatable as part of the economic fix.
- A bipartisan bill must be on the floor before December 31st in order to avoid falling off the cliff but increases in the tax rate for wealthiest Americans, back to the level at which they were during the Clinton administration, were previously not on the Republican tale. Now with further breakdowns in negotiations among the GOP itself, a compromise that favours what the President wishes seems more likely than it has during this entire process. Conservative House Republicans who felt slighted by Speaker Boehner reminded him
- Speaker of the House John Boehner does not have control of his caucus. Republican leadership hustled to push a deal (“Plan B”) that would make it more acceptable for conservatives to swallow a deal with the President. It failed. Big. Even though President Obama increased his income threshold from $250,000 to $400,000 over the past week — and he announced, to the dismay of progressives everywhere, that he is willing to put changes to Social Security on the table — it was clear that the Boehner did not have support enough from his own base that would be needed to pass legislation in a bipartisan manner. Now what has happened is that more than ever, the Republican Party has solidified their reputation as the party that protects the interests of the very wealthy.
Let’s face it: nobody knows exactly what the POTUS has in mind, nor does anybody know the full extent of any fiscal cliff dealings. The President has heard his base speak, so at this time is based is going to have two continue to make its voice heard but understand that we don’t know all the facts surrounding matters such as the “chained CPI” which ties the rate of growth of inflation to Social Security benefit payouts.
Maybe at this point the best thing to do is go over that “fiscal cliff” because even though it means everyone’s taxes will go up at the beginning of the year, it would also mean that lawmakers would finally be able to tap all the nations massive military budget. A financial review from the ground on up as to what we spend on current and prospective wars will reveal that soldiers and veterans do not benefit but, rather, defense contractors do. An across-the-board evaluation of the financial and operational waste all agencies could result in reallocation of necessary funds to programs that range from keeping many Americans out of abject poverty, to educating students, to rebuilding our infrastructure. Social Security doesn’t contribute to the nation’s deficit but waste and wars do.
Frankly, re-evaluation doesn’t sound like falling off a cliff; it sounds more like peering over the edge to see that what awaits us is a more equitable system for all.
Image Source: The inimitable Lalo Alcaraz
The Brooklyn Dame is that snarky Brooklyn chick from the UK who founded Borderless News and Views. She enjoys left-side politics, economics, finance and great seafood chased with a glass of Muscato. When she’s not plotting her escape from her corporate overlords, she’s writing ‘fight the wrongs on the Right’ articles. You can follow her on Twitter and read more of her posts on the BNV site or on BNV’s Facebook page.