Over the Cliff, Spending Cuts Loom

Sunday, December 30, 2012 As of 10:39 AM EST
By Damian Paletta

WASHINGTON—During one of the presidential debates in October, President Barack Obama responded bluntly to a question about looming spending cuts by saying they “will not happen.”

Now, with a deadline for action imminent, it appears the cuts could most certainly happen, at least temporarily.

In the mad scramble by political leaders to avoid the so-called fiscal cliff, Congress and the White House are focusing most of their attention on preventing tax rates from increasing on most workers, extending emergency unemployment benefits to roughly two million Americans and on preventing deep cuts in Medicare payments to doctors.

But another high priority, which appears thornier to resolve, is the $110 billion in annual spending cuts that were put in place last year and are set to begin on Jan. 2, 2013, and continue for eight more years.

More at the link.

The Budget Control Act of 2011 was the compromise between President Obama and the Republicans, in which the Republicans agreed to yet another increase in the debt ceiling in exchange for $2.1 trillion in spending cuts over ten years. The President’s statement that the spending cuts “will not happen” demonstrate just how honest he was in the whole deal; he had not the slightest intention of anything other than cosmetic spending cuts.

And now, with the so-called fiscal cliff looming, the Democrats and Republican leadership in Congress is trying desperately to avoid going over that cliff, and only the steadfastness of the Republicans in the House has kept Speaker John Boehner from selling out the whole show. The politicians might just get weak-kneed, worrying about what the public will think, worrying about the next election, but if the parties compromise in the fashion that is talked about, then the Republicans surrendered on the debt ceiling — which we have almost reached yet again — for not one damned dime in spending cuts.

The Republicans hoped that last month’s elections would have ended the Obama presidency, and that they’d be dealing with someone who had some actual sense in the White House come January 20th, but it didn’t work out that way. So we’re stuck with a President who wants to increase taxes, but only on the top producers, which would yield a revenue increase of less than 20% of the budget deficit, and doesn’t want to cut spending at all. Giving in to the President’s plans would yield a deficit twice as large as the largest one under President Bush, and add nearly another trillion dollars to the national debt, in just one year. The 11th hour deal being discussed right now won’t help much, either:

Fiscal Deal Would Do Little To Shrink U.S. Deficit

Updated December 29, 2012, 4:28 p.m. ET
By Damian Paletta

WASHINGTON—The last-minute tax and spending deal being discussed in the Senate would do little to reduce the deficit, and could actually expand it, leaving difficult choices about Medicare, Social Security, and the country’s borrowing limit until next year.

Much more at the link, but the first paragraph tells you all that you really need to know: any agreement to avoid the fiscal cliff is simply going to kick the problem down the road for another year. This is a problem we cannot ignore, but ignoring it is exactly what the government is dickering out how to do! The Republicans want a little something to try to save face, but they aren’t going to actually deal with the problem, and the Democrats don’t even care about the problem. The Democrats can’t care: they built their winning electoral coalition on the concept of retaining lower tax rates for everybody except the most productive Americans, and on maintaining high levels of government spending. To do something actually responsible would require the Democrats to abandon their electoral coalition.

Karen wrote, a couple of days ago:

Marc Thiessen argues in his latest Washington Post piece that conservatives should let us go over the fiscal cliff, so the people will finally be forced to pay for the government they voted for.

Barring a last-minute breakthrough, taxes will go up for every American taxpayer on Jan. 1 — and that’s a development conservatives should welcome.

Don’t get me wrong, it would be better not to raise taxes on anyone, pursue pro-growth tax reform and cut the size of government instead. But that’s not what the American people voted to do last month. Americans cast their ballots for big government.

Now it’s time to pay for it.

Until now, the growth of government under President Obama has not hit the pocketbooks of most Americans. During Obama’s first term, federal spending grew to more than 24 percent of GDP — the highest it has been since 1946. Yet almost no one in the country (except smokers and those who frequent indoor tanning salons) saw their taxes rise. Quite the opposite: 160 million Americans saw their payroll taxes reduced from 6.2 to 4.2 percent.

How can we expect people to care about the growth of government if it doesn’t cost them anything?

Read the whole thing. I can’t say I disagree. People are clueless about how much this government they’ve given us is costing. If it hits them all in the wallet maybe they’ll wake up and see the light. Unfortunately, those of us who didn’t vote for this will also be forced to pay the price, but we will be paying for it one way or the other. May as well get it over with so there’s a chance to possibly preserve something for future generations, who had absolutely no say in what we’re doing to them.

I’ve said it many times in the past: the budget should be cut, and I mean cut to the bone, to balance the budget, and that taxes were already high enough. The problem is that we spend too much money, way too much money. But, if taxes have to be increased, they should be increased on everybody, and going over the fiscal cliff both increases taxes on everybody and cuts spending, albeit not enough.

The Democrats, knowing that the Republicans want to protect Defense spending, are trying a scare tactic. Again, from THE WALL STREET JOURNAL:

Pentagon Readying 800,000 for Rolling Layoffs

Updated December 30, 2012, 2:19 p.m. ET
By Dion Nissenbaum and Damian Paletta

WASHINGTON—The Pentagon is preparing to notify its entire civilian workforce to prepare for furloughs if Congress and President Barack Obama are unable to reach a deal before Jan. 2 to avert automatic spending cuts.

A senior defense official said Sunday that the Pentagon would notify 800,000 civilian workers to brace for furloughs in the new year, meaning the workers would be ordered to take mandatory leave without pay for a certain period. The warning is much gloomier than the agency recently offered employees, as it had said there wouldn’t be an immediate impact on personnel or operations if a deal wasn’t reached by January.

But the senior official said that notices would go out soon after sequestration took effect. The official didn’t know when the first layoffs would take place, but said they weren’t likely to happen immediately.

More at the link.

Guess what? Your Editor does not have a problem with that, not in the slightest! He would rather see other parts of government cut, but cutting somewhere has to be done. The biggest problem with the sequestration provisions of the Budget Control Act is that they are too small!

So, let’s go off that cliff! That would mean that Yorkshire’s taxes would go up, that Eric’s taxes would go up, that Hoagie’s taxes would go up, that Wagonwheel’s taxes would go up, and that my taxes would go up. It might even mean that the Phoenician’s taxes would go up, as New Zealand would have to pay for more of its own defense burden.

Then, as Karen noted, when people see that the huge government for which they just voted started to take a bigger chunk out of their paychecks, maybe they’ll wise up and not vote for ever-more government spending.

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