Skip to main content

What the Fiscal Cliff Means for the Middle Class
Now that the election is over, it seems like all the politicians and pundits can talk about is the so-called "fiscal cliff." But the chatter around the fiscal cliff is deeply weird, so in this post I will explain what it is and what the issues involved mean for the middle class.

Just what is the fiscal cliff? It is the combination of spending cuts and tax increases set to take place on January 1 based on several different laws. Estimates of the consequences run as high as $800 billion next year, or 5.2% of the country's $15.29 trillion gross domestic product in 2011. Yes, that would mean a recession, with obvious consequences for the middle class. But this is only true if we did nothing after January 1, and that's not going to happen.

To put it another way, $800 billion is a 72.7% cut in the government's budget deficit for the just ended 2012 fiscal year. You would think this would make the people calling for an immediate cut in the deficit happy, but nooooo. Just the opposite, which is the weirdest aspect of the entire debate. I'll come back to that in a minute; first, let's look at the main components of the fiscal cliff.

The biggest chunk is $426 billion from the final expiration of the Bush tax cuts, according to a Bloomberg analysis in July. Of this, $358 billion is for the first $250,000 of all taxpayers' earnings, and the remaining $68 billion is for the tax cuts for income above $250,000 ($200,000 for a single person) that President Obama wants to get rid of. Both Republicans and Democrats want to retain the tax break for 98% of households, but Republicans will try to hold it hostage to the cuts for the other 2%. Since the Bush tax cuts expire if nothing gets done (because they were originally passed through the Senate's reconciliation procedure, which gave them a 10-year lifespan; then renewed for 2 years in 2010), on January 1 the Republicans will have no more leverage on this. Thus, I expect that the middle class tax cuts will be made permanent and, by early January at the latest, the $68 billion will be all that will have expired. Since the wealthy spend less of their income than do the middle class or poor, this tax increase will have little contractionary effect on the economy.

Another set of tax provision affecting couples with over $250,000 and individuals over $200,000 is contained in the Affordable Care Act. These folks will have to pay an extra 0.9% tax on earnings over the thresholds for Medicare, and an extra 3.8% on investment income, starting in 2013. According to an Associated Press estimate, this will raise $318 billion over 10 years, so we'll call it $30 billion for 2013. Since this is part of the funding for Obamacare, the President is highly unlikely to budge on this. Again, as a tax hike on the top 2%, it will have relatively little contractionary effect.

There are $110 billion in automatic spending cuts scheduled in 2013 due to the so-called "sequester." These were triggered last year when no deal was made on long-term deficit reduction. With unemployment still at 7.9%, government spending cuts are definitely harmful to the middle class. To the extent that the $55 billion cut from the defense budget comes from overseas spending, there will be little contractionary effect in this country. That is, if we closed a military base in Germany, it would have more of an effect there than here. In any event, since the United States spends 41% of the world's total military expenditure,* we could afford to redirect quite a bit of this $711 billion annual expenditure (China is a very distant second at $143 billion) to other uses. Nation building at home, as the saying goes.

The other $55 billion would come from domestic discretionary spending, so the middle class would bear the full brunt of this. Of course, neither party wants to see "their" favorite budget items cut, so there is a good chance that these spending cuts will be delayed, which would be a good thing, though not as good as shifting some military spending into the domestic budget.

There's more, of course, but the basic outline is clear: we are seeing a replay of last year's debt ceiling "deal," in which Republicans are trying to pass austerity measures the public does not support and did not vote for in the just concluded election. Indeed, a majority voted not just for a Democratic President and a Democratic Senate, but for a Democratic House of Representatives as well, with Republicans maintaining a majority only due to gerrymandering and compliant Republican courts. As Paul Krugman points out, the self-proclaimed "fiscal hawks" are tying themselves up in knots on why going over the cliff is bad when it achieves their goal of debt reduction. The answer, of course, is that they want to cut "low-priority spending," by which they mean programs benefiting the middle class. As Linda Beale argues, the right course for Democrats is to do nothing until January, when the Bush tax cuts will be gone and we can pass tax cuts more targeted to the middle class as well as redirecting spending from our bloated military to domestic programs.

* Source: SIPRI (Stockholm International Peace Research Institute) Military Expenditure Database 2011, http://milexdata.sipri.org

Originally posted to Kenneth Thomas on Thu Nov 15, 2012 at 11:25 PM PST.

Also republished by Community Spotlight.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  It only works if the tax cuts expire... (23+ / 0-)

    ...and the Democrats hold firm in 2013.

    And if that works, the Republicans will probably see a hit in the House in 2014, despite redistricting.

    Float like a manhole cover, sting like a sash weight! Clean Coal Is A Clinker!

    by JeffW on Thu Nov 15, 2012 at 11:28:57 PM PST

  •  RE: overseas military spending (7+ / 0-)

    It is my understanding that the "fiscal cliff" provision will cut all spending by 10% across the board. So that does not means closed overseas bases. It means 10% less for an overseas base budget and 10% less for the Norfolk Naval Yard budget. So it will definitely have a domestic impact.

    This is why it is better to negotiate cuts where cuts can best be made.

    But bottom line you are right. "Cliff" is a very misleading term. Budgets can be cut by 10% and in theory go on operating at "normal" levels for 90% of the year. There is ample time to negotiate after we have sailed over the so-called cliff.

    Fiscal bunny hill is more descriptive.

  •  Three times you referenced the following: (8+ / 0-)
    In any event, since the United States spends 41% of the world's total military expenditure,* we could afford to redirect quite a bit of this $711 billion annual expenditure (China is a very distant second at $143 billion) to other uses.
    ...so there is a good chance that these spending cuts will be delayed, which would be a good thing, though not as good as shifting some military spending into the domestic budget.
    ...we can pass tax cuts more targeted to the middle class as well as redirecting spending from our bloated military to domestic programs.
    The entire point of these negotiations is to make the dollars spent disappear entirely, in order to reduce the deficit. To "redirect" these cuts to other places to spend the money -- puts the deficit right back where it began without achieving any reduction at all.

    In any event, there will be no military cuts, as President Obama clearly stated in the third debate. I believe him.

    The singular threat to the nation is using the debt ceiling as a bludgeon of blackmail and extortion. The Republicans do have the power to do so. This has severe implications internationally and will certainly damage the credit-worthiness of the US -- resulting in increased costs to service our own debt..


    A child of five would understand this. Send someone to fetch a child of five. -- Groucho Marx

    by Pluto on Thu Nov 15, 2012 at 11:56:21 PM PST

    •  I disagree (5+ / 0-)

      Making the dollars spent disappear entirely, now, will be bad for the economy. When we get unemployment down to 4%, then we can talk about cutting the deficit.

      In the meantime, we spend too much on the military anyway and need money for infrastructure, education, local governments, and a lot of other things here at home. That's why I say we should be redirecting our bloated military.

      •  You misunderstand Pluto's point. (9+ / 0-)

        The anticipated cuts take away -- kaput, gone -- funds from each affected segment of the budget; it doesn't move them to another department we like better.

        I agree with you that it would be nice to redirect military spending to non-military needs, but that's not what a budget cut is.  You have merged these two things in your argument.

        •  I'm saying we should stop or quickly reverse (1+ / 0-)
          Recommended by:
          Pluto

          the budget cuts. We should not cut government spending by $110 billion a year at this time.

          If Congress writes a bill to stop the cuts, nothing makes us put all $55 billion back into the military, except Republicans' bargaining power, which will be greater on this than on the Bush tax cuts since such a bill would have to pass both houses of Congress, whereas ending the Bush tax cuts can only be stopped by a bill being passed and signed into law.

          I hope this is a little clearer.

          •  This is true: (0+ / 0-)
            We should not cut government spending by $110 billion a year at this time.
            Because the markets look ahead, it will significantly contract the GDP and likely cause a steep drop in the market (when combined with tax hikes).

            The original bill could be voided (as though it never came into existence). But could it be renegotiated, moving money from defense to domestic programs that benefit people?

            I have seen absolutely no evidence of this trend in the Federal Government.


            A child of five would understand this. Send someone to fetch a child of five. -- Groucho Marx

            by Pluto on Fri Nov 16, 2012 at 03:47:08 PM PST

            [ Parent ]

    •  I agree.. (1+ / 0-)
      Recommended by:
      Pluto

      One slight disagreement though.

      We are already seeing our credit ratings downgraded.  Qualitative easing has hurt us as well as deficit spending.

      This situation is one of those damned if you do, damned if you don't.  We will likely see lower ratings no matter what Congress does... except maybe rolling up their sleeves and passing a real budget with compromises everyone can live with.. but that ain't gonna happen.

      •  The ratings don't matter. (0+ / 0-)

        Our bonds are good. People with large piles of money are paying to park their money. It's like a bad movie review, if people like the movie and go anyway, the review is worthless.

      •  I think you meant "quantitative easing"? (0+ / 0-)

        That's how I've heard it...and it's not the problem that has caused our credit rating to be downgraded. That was entirely caused by our dysfunctional Congress threatening default instead of simply raising the debt ceiling as needed. The other contributing factor is that same Congress being unable to pass a budget or signal any kind of long term plan for deficit reduction. Basically, our problem is an unstable government (i.e., the House controlled by nutcases).

        "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

        by Alice in Florida on Fri Nov 16, 2012 at 08:38:24 PM PST

        [ Parent ]

    •  Are you (suggesting) that cuts ... (1+ / 0-)
      Recommended by:
      Pluto

      ...will have to be made in some of our domestic social and health programs wether we want to or not or else face the issue of increase spending (more debt) without raising revenue ...think taxes.  Pres. Obama repeatedly stated he would not do during this past election run-up.

      Our nations quality of life is based on the rightousness of its people.

      by kalihikane on Fri Nov 16, 2012 at 03:37:49 PM PST

      [ Parent ]

      •  Me? (1+ / 0-)
        Recommended by:
        kalihikane

        I'm merely saying there will be no military cuts under terms of the bill that passed deadlining that reality on January 1, 2013. The President made that clear. He also said that there would be tax hikes on high earners.

        The only thing that is not clear -- which he said nothing about -- is the fate of entitlement programs. So one can only guess. One analyst I trust predicts:

        It appears that the bargaining chip Obama is most likely to deploy in his upcoming negotiations with the Republicans in Congress is an increase in the age before which Americans become eligible for Medicare or for Social Security benefits, from the current 65 to 67, or 68, or perhaps even higher. The common justification for raising the age of eligibility is the increase in life expectancy since initiation of the program almost eight decades ago (for the population as a whole, it was 62 years then, versus 79 years now.

        Does it somehow follow from this that the US should raise the age of eligibility for Medicare and/or Social Security and make them more regressive?

        Even if it were true, as Obama asserts, that a majority of Americans actually voted for «cooperation», «compromise», «consensus», and «action», they would not have had $4 trillion in economic contraction or a gutting of entitlement programs in mind.

        The single goal of conservatives is to put the Federal government out of business. That's kinda the only game in town.


        A child of five would understand this. Send someone to fetch a child of five. -- Groucho Marx

        by Pluto on Fri Nov 16, 2012 at 04:01:08 PM PST

        [ Parent ]

        •  Not sure how I feel about your... (1+ / 0-)
          Recommended by:
          Pluto

          ...(clarification) of the possibilities to come.  Both wife and self have medicare (senior preferred) via local hospital and social security.  We are satisfied with both and feel strongly that we paid upfront for social security and do not want it to change.  But, we have children and grand children and want to see affordable health care and an affordable retirement safety net that is secure not at risk to "market" fluctuations and mismanagement. To achieve this we are open to fair modifications to existing programs to secure them.

          Our nations quality of life is based on the rightousness of its people.

          by kalihikane on Fri Nov 16, 2012 at 04:46:47 PM PST

          [ Parent ]

          •  I think you will see fair modifications. (1+ / 0-)
            Recommended by:
            kalihikane

            Today's "fair" however, does mean that the people who came before were the sweepstakes winners of the safety net lotto.

            It means that what we consider the bottom of the rung now will actually be middle class as far as lifestyle expectations in retirement in the future.

            This is only the first year of the baby boomer retirement explosion. That goat hasn't even begun to be digested by the boa constrictor. The US decline will see us revisiting this issue again and again.

            All to maintain the lowest tax rates of any nation on the planet.


            A child of five would understand this. Send someone to fetch a child of five. -- Groucho Marx

            by Pluto on Fri Nov 16, 2012 at 06:02:53 PM PST

            [ Parent ]

            •  Like I said, we believe it is as much ... (1+ / 0-)
              Recommended by:
              Pluto

              ... our responsibility to accept fair modifications to what entitlements we receive now to ensure those coming after us have those same opportunities. As you aptly state, we are the richest nation on the planet but we are unable to get a large enough majority of our population to understand that providing these basic services provides all of us with greater opportunities and security for all of us.

              Our nations quality of life is based on the rightousness of its people.

              by kalihikane on Fri Nov 16, 2012 at 10:45:50 PM PST

              [ Parent ]

        •  Raising the age for Medicare (1+ / 0-)
          Recommended by:
          Pluto

          eligibility is the worst idea of any that have been floated...it could even increase costs. Raising the age for Social Security retirement again is a bad idea and propbably won't save much money as more and more people are forced to take early retirement due to lack of work.

          The best thing to do on entitlements is kick the can down t he road. The least objectionable "reform" would probably be jiggering the COLA formula.

          "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

          by Alice in Florida on Fri Nov 16, 2012 at 08:45:11 PM PST

          [ Parent ]

  •  I suspect that the very first... (8+ / 0-)

    people to feel the 2013 "cliff" will be low-wage to lower-middle class wage earners. It'll be immediate.

    I say that because the payroll tax cut is set to expire. Granted this is not a Bush tax cut and is peripheral to broader debate, but tell that to someone living paycheck-to-paycheck who will have to absorb a 2% pay cut starting Jan. 1.

    I realize this was never supposed to be permanent and the long-term health of Social Security is part of this discussion. But it's amazing how a year changes things. This time last year Republicans were busy cratering themselves by opposing its extension and Obama was reaping great political benefit by supporting it.

    Now it's looking like we're going to get this fiscal party started with the most regressive action on the table.

    Ironic.

    •  Yes but people didn't notice when the received (3+ / 0-)

      those additional $$s (on purpose!) - so the huge weeping and wailing and gnashing of teeth now that they're going away seems just a tad overwrought!

      •  that $300 check was less than one extra paycheck a (15+ / 0-)

        year...and they thought they could buy us off with that?

        I was offended by the whole idea of the Bush tax cuts back in the Spring of 2001 when they were planing ahead for 2011 and making absolutely certain the tax cuts would be a re-run election issue in 2012.

        Speaking of things that were never supposed to be permanent, my father-in-law passed this e-mail onwards, and whether or not it's from Warren Buffet, I agree.

        Congressional Reform Act of 2012
        1. No Tenure/No Pension: A Congressman/woman collects a salary while in office and receives no pay when they're out of office.
        2. Congress (past, present & future) participates in Social Security. All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system, and Congress participates with the American people. It may not be used for any other purpose.
        3. Congress can purchase their own retirement plan, just as all Americans do.
        4. Congress will no longer vote them selves a pay raise. Congressional pay will rise by the lower of CPI or 3%.
        5. Congress loses their current health care system and participates in the same health care system as the American people.
        6. Congress must equally abide by all laws they impose on the American people.
        7. All contracts with past and present Congressmen/women are void effective 12/1/12. The American people did not make this contract with Congressmen/women. Congress made all these contracts for themselves. Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.
        especially the parts I emphasized, along with Remove the Social Security Cap and send those inheritance and capital gains taxes through the roof. Also let's have some windfall profits taxes on the energy companies...
        •  I recall a fairly good dog and pony show (9+ / 0-)

          a couple of Dems did when back when to illustrate the Bush Tax Cuts - they went out the parking lot where a brand new Lexus was parked, while another person was there holding a muffler.

          Illustrating the benefits to the 1% ers and the average guy/gal, respectively.    

          But most Dems went ahead and voted for the idiocy anyways.    Because the bottom line is that sadly enough "we" are bought off very cheaply.  Or just damn stupid

          •  Senators Tom Daschle and Dick Gephardt (1+ / 0-)
            Recommended by:
            NoMoreLies

            The problem was, they were trying to express the proportion of inequality, and many people thought the Bush "tax relief plan" would just give each millionaire enough money for exactly one Lexus.

            The reality was more like fleets of Lexi... but even so, both Senators were scolded for their "lack of "bipartisanship in the CorpMedia.

            Have you noticed?
            Politicians who promise LESS government
            only deliver BAD government.

            by jjohnjj on Fri Nov 16, 2012 at 05:46:18 PM PST

            [ Parent ]

          •  "Most Dems"? (0+ / 0-)

            If so, why did Republicans need to use "reconciliation" proceedures to pass it? (That's the reason it expired after 10 years.) Republicans had a majority, I'm sure they got a handful of Dem votes but hardly "most"...

            "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

            by Alice in Florida on Fri Nov 16, 2012 at 08:50:42 PM PST

            [ Parent ]

        •  The first thing I did when they made... (3+ / 0-)

          ...that stupid payroll tax compromise was to increase my 401k withholding by 2%. I didn't want to get used to the extra income or reward the proposal with better economic numbers.

          If they end the payroll tax cut, I'll just cut my 401k contributions 2% again, or rather, don't at first and see if I can get away without doing it.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Fri Nov 16, 2012 at 12:58:07 PM PST

          [ Parent ]

          •  I increased my income tax withholding (1+ / 0-)
            Recommended by:
            Sparhawk

            Everyone tells me I was stupid to do so, but when the increases come (  viz )  . . .

            "Let's see what fresh fuckwittery these dolts can contrive to torment themselves with this time." -- Iain Banks, The Hydrogen Sonata

            by Rikon Snow on Fri Nov 16, 2012 at 01:41:14 PM PST

            [ Parent ]

            •  At least you save that way (1+ / 0-)
              Recommended by:
              Rikon Snow

              I generally try to have auto-withholding of whatever type (tax, 401k, whatever) set as high as reasonable in my personal finances.

              I find it very easy to spend money that makes it into my discretionary bank account so I try to keep that value lowish.

              (-5.50,-6.67): Left Libertarian
              Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

              by Sparhawk on Sat Nov 17, 2012 at 10:25:26 AM PST

              [ Parent ]

    •  The first ones to feel it are those whose (0+ / 0-)

      unemployment benefit extensions end at the end of the year.  There's no marginal percentage change to their paychecks, like the people who will have their taxes increased a couple of percent.  They are immediately without income.

      Yes, it's not a majority of the people, but it will immediately hit them hard, and rather quickly it will hit those who rely upon the unemployed still needing housing, food, transportation, etc, to stay alive and looking for work.

  •  The Republicans are all over the place, screaming (10+ / 0-)

    at the top of their lungs about what an unmitigated disaster it will be if we "go over the cliff".

    They are only doing this because they know that they lose almost any of the small amount of bargaining chips that they hold now....and right on cue, the media is playing right along with them.

  •  It is a man-made crisis designed (19+ / 0-)

    created by Obama's catfood commission to scare the middle class into giving up their Social Security, Medicare and Medicaid for a lousy 2% tax increase on the top 2%.   We didn't trash the hotel room, but it sure looks like we're going to get stuck with the bill.    It is America's two-tiered system of justice, and it makes us just as dumb as the tea party crowd.  

    If money is speech, then speech must be money.

    by dkmich on Fri Nov 16, 2012 at 04:36:39 AM PST

  •  I like the fiscal cliff. (4+ / 0-)
    Recommended by:
    kharma, CroneWit, sagansong, WheninRome

    Cliff me.

    You know, I sometimes think if I could see, I'd be kicking a lot of ass. -Stevie Wonder at the Glastonbury Festival, 2010

    by Rich in PA on Fri Nov 16, 2012 at 04:52:26 AM PST

  •  I wish people would not (4+ / 0-)
    Recommended by:
    rudy23, AdamW, bluezen, ColoTim

    so easily buy into Republican framing.

  •  It's the fiscal roadblock, not the fiscal cliff (7+ / 0-)

    It's another corporate driven Republican hostage crisis.

    There's no cliff. Agreed, let the Bush tax cuts for the rich expire then negotiate from strength.

    look for my eSci diary series Thursday evening.

    by FishOutofWater on Fri Nov 16, 2012 at 08:50:33 AM PST

    •  Actually It is the Deficit Reduction (2+ / 0-)
      Recommended by:
      WheninRome, Kenneth Thomas

      ... or Deficit Slashed
      ... or Deficit Cut
      ... or Deficit Dissapear

      I wish someone would asked the "Fiscal Cliff" people why they are against cutting the deficit?  

      Poor man wants to be rich. Rich man wants to king. And the king ain't satisifed until he rules everything. B.Springsteen

      by howd on Fri Nov 16, 2012 at 12:36:26 PM PST

      [ Parent ]

  •  Iraq war is why we are facing the cliff: (4+ / 0-)
    Recommended by:
    howd, WheninRome, ColoTim, auditor

    The unnecessary Iraq war is one of the reasons for the predicament we are in: a missing meme, in my opinion and I guess we need to bring this back into the narrative before we conclude the negotiations. We need to as a populace accept responsibility for either actively or tacitly supporting a war that was not needed. I would say that this is the cost of doing business,when a country chooses to go to a war: this fact cannot be erased.

    As I see it:
    We elected President Obama to have opposed the war and now we have re-elected President Obama to cleanup the costs and consequences of the war, SuperStorm Sandy and everything that nature and the rightwing, faux rightwing (Bowles on Bloomberg this morning was disingenous to say the least) idealogues.

    Iraq War cost us about a $1T in deficits and lives of our soldiers. And if we go back in time, Bushco fought the war using budget supplemental and refused to add them to the deficit before they left office allowing the right wing to claim that President Obama increased the deficits when the President was simply preventing further accounting tricks and bring out the truth to the American Public (though I reserve judgement on the wisdom of that move, because we would probably not have been facing the cliff now and could have passed the ACA with less hurdles to clear).
    In summary, I hope that we tie the cliff to the error in our collective judgement by waging an unnecessary war.

    •  Bush's Off Books War Costs Put On Obama's Bill (0+ / 0-)

      Do you have a link for that?  I would love to be able to use that information in discussions I have with my Obama "lovers".

      Poor man wants to be rich. Rich man wants to king. And the king ain't satisifed until he rules everything. B.Springsteen

      by howd on Fri Nov 16, 2012 at 01:15:30 PM PST

      [ Parent ]

      •  Google is my friend..hope this helps (0+ / 0-)

        That Bushco were fighting the war on supplemental was sort of common knowledge even before the 2008 elections.

        I just looked this up on google and this seemed like something relevant to this discussion. I am sure that CBO will have documents around this as well somewhere for the wonks among us to write about this and the impact this had on the subsequent health care debate: specially the public option.

        This was one of the initial steps that President Obama took in summer of 2009 (iirc) before the healthcare reform debate, can someone pls help me out here.

        I had naively assumed then that the President knows best, but as soon as I heard the Republican machine go after President Obama for raising the deficits, it dawned on me that this was the 13th dimension chess in play as opposed to the 11th dimension one which normally benefits the side you are on (because 13 is the unlucky number).

        When the OFA or DSCC would call on me for campaign donations, I would raise this issue and ask them to comment on that, of course, their response was : will you volunteer for the Obama campaign when you get behind the President. The other issue was Bill Halter: that did really cost our cause as well and it did not help that the DSCC was still campaigning for Blanche Lincoln (I hope I got the names right).
        Hope this helps.

  •  Preserving tax cuts for the rich. (3+ / 0-)
    Recommended by:
    bluezen, howd, ColoTim

    If we don't do anything to change things then over the next year things would get bad. But the idea of arguing we shouldn't go over the "fiscal cliff" is to scare Democrats into giving in to Republicans on Bush tax cuts for the rich. Once January 1st comes the Bush tax cuts for the rich are gone for good. A bill reinstating them would have to pass the  House and the Senate and be signed by the President. This won't happen. The only way to preserve tax cuts for the rich is to preserve them as a part of a bill to avoid the "fiscal cliff."

  •  I missed mention of the impact of what (1+ / 0-)
    Recommended by:
    howd

    driving over the "fiscal cliff" would mean to the vast majority of US workers and citizens which is .... nothing.

    Send conservatives to FilthyLiberal.com for re-education.

    by filthyLiberalDOTcom on Fri Nov 16, 2012 at 10:22:47 AM PST

    •  Does anyone have a tax calculator (0+ / 0-)

      which would show us what the effect on salaries would be?  If I understand it right, we're talking about both a raise in the marginal rates as well as the end of the payroll tax cut, so those are two things that would need to be considered.

      "Believe nothing, no matter where you read it, or who said it... unless it agrees with your own reason and your own common sense." -The Buddha

      by Brian A on Fri Nov 16, 2012 at 11:13:56 AM PST

      [ Parent ]

      •  Anyone who has young children (0+ / 0-)

        and has an income above the EITC level will see their taxes go up by $500 per child, for starters. Many of the "47%" will find themselves owing federal income income tax even though their income and deduction eligibility have not changed.

        "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

        by Alice in Florida on Fri Nov 16, 2012 at 08:57:03 PM PST

        [ Parent ]

    •  Saw a CNBC Scrawl ... (0+ / 0-)

      ... stating that the "Fiscal Cliff" would increase "middle class" taxes by $2000 a year.

      Poor man wants to be rich. Rich man wants to king. And the king ain't satisifed until he rules everything. B.Springsteen

      by howd on Fri Nov 16, 2012 at 01:17:54 PM PST

      [ Parent ]

  •  Welp, (4+ / 0-)

    as a lower-middle class academic scientist person funded completely by NIH grants, I'm pretty worried.

    NF

    •  Nobody cares about your job (0+ / 0-)

      I'm in the same boat you are.  But very few people in this community seem to care about the hundreds of thousands of jobs that will be lost if we drive over this cliff.  It's all being "made up by the republicans" says those who are not standing in the crosshairs.

      $100B of government spending is a lot of jobs people.  

  •  $700 billion + in military expenditures. (2+ / 0-)
    Recommended by:
    Kenneth Thomas, tle

    I have no respect for either party when they get all earnest and sincere about the need for shared sacrifice.

    Where your Money is, there your heart shall be.
    Apparently both parties delight in war unending.

    "Let's see what fresh fuckwittery these dolts can contrive to torment themselves with this time." -- Iain Banks, The Hydrogen Sonata

    by Rikon Snow on Fri Nov 16, 2012 at 01:37:20 PM PST

  •  slight addendum (2+ / 0-)
    Recommended by:
    bubbajim, Kenneth Thomas
    The answer, of course, is that they want to cut "low-priority spending," by which they mean programs benefiting the middle class.
    and the poor.

    Maybe one day the Fourth Estate will take their jobs seriously. Or not..

    by Anthony Page aka SecondComing on Fri Nov 16, 2012 at 03:06:03 PM PST

    •  I'm sick of hearing about the middle class. (0+ / 0-)

      No one cares about the working class. No one cares about the poor.

      The working class - blue and white collar - are about 70% of this country. The poor are about 20%. The middle class are about 9%. The wealthy, as we know, are about 1%.

      The only thing I care about the middle class is their spending, which drives the economy. They can afford NEW cars, kitchen appliance "updates" and the latest and greatest in home entertainment technology, etc. Bully for them. We need their spending, I'll admit.

      But where was your middle class when working class jobs were being outsourced and programs for the poor were being slashed? Voting in favor of just these things.

      First they came for the Jews
       and I did not speak out
       because I was not a Jew.
       Then they came for the Communists
       and I did not speak out
       because I was not a Communist.
       Then they came for the trade unionists
       and I did not speak out
       because I was not a trade unionist.
       Then they came for me
       and there was no one left
       to speak out for me.

             -Martin Niemoller

      The working poor haven’t abdicated responsibility for their lives. They’re drowning in it. -Ezra Klein

      by bubbajim on Fri Nov 16, 2012 at 04:35:42 PM PST

      [ Parent ]

      •  Everyone has different definitions (0+ / 0-)

        of "middle class"...the one people are using now encompasses what used to be called "working class"...what you're calling "middle class" is what most people consider rich or near-rich. It is true that Obama's limitation on tax increases is rather broad in its definition of "middle class" as including many in the top 5% (only the top 2% being rich enough to have their taxes raised).

        "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

        by Alice in Florida on Fri Nov 16, 2012 at 09:01:30 PM PST

        [ Parent ]

  •  It's not a "fiscal cliff"... It's a "fiscal bluff" (1+ / 0-)
    Recommended by:
    dclawyer06

    Have you noticed?
    Politicians who promise LESS government
    only deliver BAD government.

    by jjohnjj on Fri Nov 16, 2012 at 05:30:02 PM PST

  •  There's also political danger involved... (2+ / 0-)
    Recommended by:
    Alice in Florida, Kenneth Thomas

    if the Dems raise the age of eligibility for Medicare or tinker with Social Security. If they do, the voters will turn on them in 2014.

    It's a trap.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site