Today’s breathless debate about whether Obama’s proposals or the GOP’s replies will help us avoid the ‘fiscal cliff’ is the modern equivalent of the ancient slugfest over the Nestorian Heresy. That was an urgent debate about whether Jesus of Nazareth was fully human, a divine being, or a goddish entity somewhere in between. Isn’t it just marvelous to see that the biped race can still engage in these sorts of arcane battles 17 centuries later? I’ve no doubt that given half a chance and appropriate weaponry, the Reds and the Blues would sally forth with gusto and beat each other senseless, just like they did in 423 C.E.
Why is there a ‘cliff’, and why do we have to rush ourselves into a bipartisan deal to avoid rushing ourselves over it? Simple answer: it’s not there. Yes, some tax measures will expire on January 1—so what? Neither side wants to take the blame for payroll taxes on the average worker to be restored to their prior levels, but the Bush-era tax cuts favoring the wealthy expire, too.
Dean Baker, who twits that tendentious GOP propagandist and willful ignoramus David Brooks at Beat the Press, points out that Obama holds all the necessary cards—if he should choose to use them:
If nothing happens right now, the top tax rate goes to 39.6 percent on January 1, 2013. There is nothing that John Boehner and the Republicans can do to stop this. Furthermore, President Obama has a mandate to raise the top tax rate. Brooks probably missed this, but we just had a lengthy election campaign where taxes on the rich were the central issue. President Obama won.The ‘fiscal cliff’ that we’re supposed to be all skeered of is an overstuffed, papier-maché wolf that our leaders say they can hear howling somewhere in the snowy wastes beyond the Beltway. But there is absolutely no evidence that current deficit spending is leading us into perdition or that a real economic recovery would not restore historic tendencies in the federal budget and at least partially resolve the deficit issue.
But the ‘fiscal cliff’—which should always be placed in quotation marks to distinguish it from something real—is an excellent opportunity for the Repubs and, sadly, the president as well to do what they both salivate over: plunge daggers into the ribcage of Social Security and Medicare/Medicaid. This is also known as the “Grand Bargain” or more accurately the “Catfood Campaign” aimed at encouraging our seniors to go back to the good old days when varieties of Friskies were the dinner options starting at about the 20th of every month. Although neither of these issues is directly involved in the expiring tax rate business, Obama has been saying for years that he is willing to chip away at these New Deal legacies in exchange for higher taxes on the rich.
The pity is that Obama probably will get what he is demanding and that it will be meaningless in the long run. Boosting the tax rate on high earners can and will be subverted in other ways, but the very dangerous precedent of a Democratic president ceding ground on the big social insurance programs of the 1930s and 1960s will open up a floodgate of demands to go further and deeper. In fact, we are rarely reminded that the tax break given two years ago was itself based on a very unwise precedent, that of allowing workers to forego the very payroll taxes that assured them they were buying retirement insurance from the federal government and have the right to then receive it. How much easier to beat the drums about the alleged (and false) ‘bankruptcy’ of the Social Security trust when legislators themselves are undermining its income by pandering to the universal desire of people to pay less!
It is particularly ironic and annoying that the Obama campaign is using its recently compiled lists of supporters to pump up this campaign—something his people studiously refused to do when Obamacare, financial regulation, or other truly important issues were at stake. But they don’t hesitate to corral people into this entirely bogus World Wide Wrestling match complete with deadly ‘blows’ and ‘throws’ over the ‘fiscal cliff’. I’ll stick to real controversies, like whether the Virgin Mary’s nether parts remained intact throughout her subsequent childbirths or just during you-know-who’s.