A showdown over the fiscal cliff

  • Article by: RAMESH PONNURU , Bloomberg View
  • Updated: November 21, 2012 - 8:03 AM

There are a few ways fiscal talks could play out, but the probable result is gridlock and blame.

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my4centsNov. 20, 12 7:45 PM

I agree that gridlock is the most likely scenario we will see. The problem for me is that I also think Republicans will be blamed. Might be better to get what they can in negotiations, even if it is small, and let the Democrats hang themselves. Allow their plans to move forward and hope that it won't be too late to fix things in two years.

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hobie2Nov. 20, 12 8:08 PM

There will never be a solution until we deal in one world, address the basics, and stop mixing piles of money in order to make an argument or to steal another's money... The US has two large expenditures, funded by two large revenues. One expenditure is the US operating budget, funded by the taxpayers. The other expenditure is Social Security's four trust areas, funded by wage earners, insurance premiums, and interest on the trusts... Deal with each on its own, or we will have confusion that will let the looting of one by another, and we will have solutions that make using a recipe for roast turkey to make a cherry pie look correct... Right now, one expenditure is routed through the other entity, and the total money passing through the US government is called "US spending". US spending is NOT what the taxpayers fund, and the money from Social Security trust areas do NOT and HAVE NOT contributed to US debt... Deficit is what we are short in a year - the deficit at the end of the year becomes debt... Separate the two main expenditure entities - do not allow any patches funded by taxpayers - future, potential, or present - to even be in the administration of the other. Each administers its own money. If one wants to pay the other to write the checks, fine. But keep the Treasury Social Security checking account separate... And because US debt has NOT ever been from Social Security - THEN we can look at the other entity, the operating budget, and see why we are spending so much - and fix it - instead of looking at areas that do NOT contribute to debt to fix the debt. Other wise it's confuse and loot and more debt - and worse, wrong solutions.

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turgidNov. 20, 12 9:24 PM

Ultimately this will come down to whether Boehner and the House chooses to accept the president's plan or go over the cliff. If history is a guide, the House will choose the cliff to protect their conservative credentials. If the Dem's plan is a reasonable one, the GOP will be blamed for the consequences, and the senate will turn over in the next election. The question is how reasonable are the Dems willing to be?

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my4centsNov. 20, 1210:49 PM

turgid - You may be right, but it should not come down to Boehner and the House choosing to accept the president's plan. Neither should it come down to Obama and the Senate accepting the House's plan. There should be real negotiating that both sides can agree to. Otherwise, might as well let the tax rates rise for everyone and let the mandated spending cuts begin.

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pumiceNov. 20, 1211:29 PM

From the article: "Why is Obama demanding so much revenue?" Someone needs to remind Ramesh Ponnuru that Bush 43's long-term tax-cutting, no-tax-war-making, and underfunded Medicare Part D policies added $5.1 trillion to the national debt, and that the economy shrank during the Great Recession which led to back-to-back-to-back trillion dollar deficits in 2009, 2010 and 2011. That's why the President is "demanding so much revenue."

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pumiceNov. 20, 1211:40 PM

From the article: "Republicans seem unlikely to accept steep tax increases on the rich -- increases they would have to vote for, not just allow to take place -- unless they get entitlement reforms to their liking. That wouldn't mean just increased copays in Medicare or higher eligibility ages, but something akin to Rep. Paul Ryan's premium-support plan." Restoring the marginal rate on income above $250,000 from 35% to 39.6% qualifies as a "steep" tax increase? Really, Ramesh??? And Ryan's premium-support plan for Medicare "concentrate[s] on high earners"??? On November 6, voters showed that we didn't fall off that particular turnip truck.

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pumiceNov. 20, 1211:46 PM

From the article: "Many liberals don't want to make Medicare and Social Security less generous even to affluent retirees." So then, Ramesh. Returning the marginal tax rate to 39.5% won't raise enough money to balance the budget let alone pay off the national debt because there aren't enough high-income earners, but means testing Medicare and Social Security will???

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lostwolf95Nov. 21, 12 1:01 AM

I agree that these entitlements need to be capped. It was constructed as a safety net, not as a retirement plan. Ideally, we should keep the entire Clinton tax rates AND close the loopholes on the rich and the estate tax. Add spending cuts to programs which are not needed restructuring medicare and medicaid and cut the defense spending in half (along with about 2 years of tax breaks for companies which hire vets). This would ensure that the economy continues to grow, we have enough expenditures to secure our infrastructure and education and can reduce our deficit. I agree, the most likely result is the fiscal cliff.

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ninetyninerNov. 21, 12 6:03 AM

Republicans will be blamed if they do not compromise. They lost the election and they will lose the next one if they resort to their usual tactics. Go ahead, make our day. This fiscal cliff will be a metaphor for the Republican party.

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punky2012Nov. 21, 12 6:20 AM

"Someone needs to remind Ramesh Ponnuru that Bush 43's long-term tax-cutting, no-tax-war-making, and underfunded Medicare Part D policies added $5.1 trillion to the national debt," NO, it did not. TAX REVENUE INCREASED AFTER THE BUSH TAX CUTS. Want to see for yourself? Go to Yahoo and search for "White House Budget Historicals". The first result is Obama's White House website with spreadsheets containing ALL of the nation's revenue, spending, and budget deficits. In EIGHT YEARS from the start of 2001 to the end of FY 2008 the TOTAL budget deficits including ALL spending ("off budget" and wars which are FULLY ACCOUNTED FOR SPENDING contrary to Democrat lies) was $2.005 trillion. From FY 2009 through the end of Sept. 2012 the USA ran total deficits of $5.094 TRILLION. Obama got elected and he and the Democrats IMMEDIATELY spent $787 BILLION on a failed stimulus. Within weeks they ALSO SPENT another $410 BILLION on an omnibus spending bill. That's $1.2 TRILLION in borrowing and spending from Obama and the Democrats in 2009, and they also passed many smaller bills to "keep teachers on the job" and crap like that. Democrats keep repeating the lie and people believe it. Why? Download Obama's spreadsheet and you can SEE FOR YOURSELF! Table 1.1. One more thing: Bush had to pay for 9/11 and Hurricane Katrina which cost HUNDREDS OF BILLIONS of dollars and are INCLUDED in his budget deficits. Obama has had no such catastrophes.

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