Washington’s Lemmings Head for the Fiscal Cliff

The incentives are lined up for the White House and Congress to miss their self-imposed Dec. 31 deadline.

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OLIVIER DOULIERY / UPPA / ZUMA PRESS

President Barack Obama speaks at a bipartisan meeting of congressional leaders as House Speaker John Boehner looks on, Nov. 16, 2012 in Washington.

Surprise, surprise. Democrats and Republicans are stalemated in talks to avoid tax hikes and spending cuts that will begin to kick in January. On Sunday, House Speaker John Boehner told Fox News, “We’re nowhere.” Top White House adviser Gene Sperling told Bloomberg, “It’s for [Republicans] now to come forward with their plan.” There will be moments of hope between now and the end of the year, no doubt, but long-time Washington budget experts think the chances of a resolution to the impasse are receding to the spring at the earliest.

What unseen forces are compelling Washington’s leaders to jump off the so-called fiscal cliff like so many lemmings, those Arctic rodents known for supposedly committing suicide in mindless droves by leaping en masse into the frigid ocean?

First, the political incentives behind stalemate have become more acute in the year and a half since talks last broke down, not less. On the president’s side, he won the November election arguing that we should solve the budget mess in part by raising tax rates on the wealthiest Americans. By the end of the week, senior White House officials were explicitly insisting on higher rates as part of a deal. On the Republican side, every GOP House member who was elected for the next Congress ran against raising tax rates and thinks they won on the issue too; they have been equally absolute that they won’t raise rates.

In that battle, the President rightly feels he has the upper hand: the fiscal cliff itself was set up to give the him an advantage when it was passed in August 2011. At the time it was seen as a big win for the Tea Party in that the fiscal hawks got the threat of $1.2 trillion in spending cuts over ten years, beginning Jan. 2, 2013. But while defense cuts will be made across the board, something Republicans have been eager to avoid, 47 specific social programs for the poor are exempt from the cuts, as is Medicaid, shielding some Democratic interests from at least some of the hit. Obama has a political advantage, too. He has said he’ll sign a bill, already passed by the Senate, that would protect all but the richest 2% in the country from income tax hikes, if only the GOP House will pass it.

Unfortunately, Obama’s advantage won’t force an early end to the impasse. That’s because Republican insistence that they will not raise any tax rates makes sense when you see how the picture changes for them in the new year. When everyone’s tax rates are poised to go up next year, GOP House members can agree to marginal rates for the rich that would have been a tax hike in December, but are lower than the newly reinstated Clinton-era rates. The same deal that would make them pledge-breaking tax hikers now will make them tax-cutting heroes after the deadline.

What of the ominous Dec. 31 drop, the catastrophic fall that comes with the cliff? If nothing is done all year in 2013 the damage will be real, likely causing a new recession. But for all the talk of an imminent crisis, there are ways the administration can ameliorate the short-term effects of the deadline. First, to prevent companies from cutting paychecks as they withhold income at January’s higher tax rates, the Treasury can tinker with its withholding formulas to push some of the draw-downs past April, by which time they may hope to have a deal. The White House can also avoid some early pain from the $500 million in spending cuts mandated by sequestration through apportionment, also delaying the pain until later.

So maybe Washington’s politicians (and those of us following them) aren’t mindless cliff-jumping rodents after all? Sorry. Scientists have known for decades that the little hamster-like creatures don’t commit mass suicide. The Academy Award winning Disney documentary that led to widespread acceptance of that myth in the 1950s was fabricated. The danger for Americans, however, is very real. Lemmings do die in mass migrations every few years, but it’s not the jump that kills them: it’s the long, slow slog that follows.

433 comments
SentientBeing
SentientBeing

Sweet and Sour only makes sense on Chinese egg-rolls. Slavery is slavery. It doesn't matter if it is sweet, sour, sweet-and-sour, or even to whom it is sweet, sour, or sweet-and-sour. Fear, Ignorance, and Populism only works in the short time. Sooner or later reality surfaces. 

Lo dulce y agrio solamente hace sentido en los rollos de huevo Chinos. La esclavitud es esclavitud. No es importante si es dulce, agria, dulce y agria, or hasta a quien le es dulce, agria, o dulce y agria. El miedo, la ignorancia, y el populismo solamente sobreviven por poco tiempo. Tarde o temprano la realidad sale a la superficie.

outsider
outsider

As the Republican Party licks its wounds from last month’s election and decides where to go from here, moderating on immigration has emerged as the top priority. The goal is to appeal to Hispanic voters, but if the move is a purely political ploy instead of earnest shift in thinking, then Republicans risk turning of the very group they are trying to appeal to. So they have to convince Hispanics that they’ve seen the light are a ready to change.

This, however, won’t help. At a conference of senior aides from both campaigns organized by the Harvard University Institute of Politics, Mitt Romney campaign manager Matt Rhoades tried to execute the shift, but gave away the game in the process. He said he regrets letting Romney move so far to the right on immigration, not because it was bad policy, but because it ended up being a tactical mistake. Jeff Zeleny reports:

When asked directly whether Mr. Romney regretted tacking to the right on immigration to appeal to conservative primary voters, the room fell silent. Stuart Stevens, a senior strategist to Mr. Romney, shook his head no. But after pausing for several seconds, Mr. Rhoades said, “I regret that.”

He went on to explain that the campaign, in hindsight, had been too worried about a potential threat from Gov. Rick Perry of Texas, who jumped into the race to challenge Mr. Romney as the jobs-and-economy candidate. For weeks in fall 2011, Mr. Romney hammered Mr. Perry on Social Security, particularly his calling the program a “Ponzi scheme” that should be overtaken by state governments. “In retrospect,” Mr. Rhoades said, “I believe that we could have probably just beaten Governor Perry with the Social Security hit.”

This moment tells us a couple of important things. First, Romney was as pliable as critics suspected, choosing policy positions based on political expediency. He needed to beat Rick Perry, so he attacked the governor from the right on immigration. Rhoades doesn’t even pretend that Romney took a principled stance on immigration. In fact, he doesn’t say anything about the merits of the policy and what Romney actually believes about immigration (if such a belief even exists) is irrelevant. Rhoades’ logic is basically that what wins elections is good policy. Presumably, if Romney had won, then Rhoades would not have regretted letting Romney tack to the right at all and his “self-deportation” rhetoric would instead have been a brilliant move.

paulejb
paulejb

"Consider also this Reuters story from Greece:

“For hours the leader of the Greek journalists’ social security fund had been chairing a meeting about disastrous losses on retirement savings caused by the country’s economic collapse. ‘She tried to present herself as the fund’s savior and asked (members) to double contributions to 6 percent of salaries,’ said one of those present that night at the Titania hotel. Spanopoulou, 58, did not succeed.

“When she rose to leave around midnight, enraged fund members first swore, then waded in punching, kicking and tearing at her clothes, according to witnesses. A bodyguard managed to bustle her out of the room, but another group caught her just outside the hotel and gave her a second beating. She spent the night in hospital.

“It was a brutal sign of the fury many Greeks feel at the way the country’s debt crisis has dashed hopes of a comfortable old age. Greece’s pension funds – patchily run in the first place, say unionists and some politicians – have been savaged by austerity and the terms of the international bailout keeping the country afloat.”

http://www.thegatewaypundit.com/2012/12/mona-charen-warns-of-mad-max-and-unraveling-of-civilization/

Just a glimpse of the future that Obama's policies have in store for us.

roknsteve
roknsteve

OT, I just read that Fox News Roger Ailes wanted Gen. Petraeus to run for President.  Is Paulie really Roger Ailes?  It makes crazy sense.

outsider
outsider

WASHINGTON -- Led by Republican opposition, the Senate on Tuesday rejected a United Nations treaty on the rights of the disabled that is modeled after the landmark Americans with Disabilities Act.

With 38 Republicans casting "no" votes, the 61-38 vote fell five short of the two-thirds majority needed to ratify a treaty. The vote took place in an unusually solemn atmosphere, with senators sitting at their desks rather than milling around the podium. Former Senate Majority Leader Bob Dole, looking frail and in a wheelchair, was in the chamber to support the treaty.

The treaty, already signed by 155 nations and ratified by 126 countries, including Britain, France, Germany, China and Russia, states that nations should strive to assure that the disabled enjoy the same rights and fundamental freedoms as their fellow citizens. Republicans objected to taking up a treaty during the lame-duck session of the Congress and warned that the treaty could pose a threat to U.S. national sovereignty.

"I do not support the cumbersome regulations and potentially overzealous international organizations with anti-American biases that infringe upon American society," said Sen. Jim Inhofe, R-Okla.

American Emotionalism 

http://www.huffingtonpost.com/2012/12/04/disability-treaty_n_2238181.html?utm_hp_ref=politics

outsider
outsider

This is for you paulie - and the whole trashing of the electorate:

Mitt Romney was not the problem for Republicans this year. In fact, he was the best candidate that Republicans had, by far. One of the best they've had in decades. Without Mitt Romney at the top of the ticket, Republican candidates across the country would likely have been crushed.

Seriously.

Consider who was running for president in the Republican Party this year.How do you think Herman Cain and Donald Trump would have done against Barack Obama? Remember: at one point, they each were leading in Republican polls.

So was Michele Bachmann. She would have had independents ducking for cover to the Democratic side.As much as Ron Paul's supporters were die-hard to the end, for a general election conservatives disliked him, and most of the rest thought he was a cranky old loon.

Jon Huntsman had much to offer, except to Republicans, and only registered 2 percent of the vote.That leaves Newt Gingrich and Rick Santorum.

Newt Gingrich has more negatives than electrons in uranium. He's a far-right ideologue who led the impeachment of Bill Clinton, shutdown the government, and left Congress soon after being sanctioned for ethics violations. Rick Santorum is so much father right that he literally wanted to make condoms a presidential campaign issue. If either of these candidates led the Republican ticket, it would have risked blowing the entire GOP back into the 19th Century.

All that leaves is Mitt Romney. For all his flaws, Mr. Romney was not only the best, but the only nominee Republicans could have challenged Barack Obama with this year.

In fact, going further, for all the GOP Expert angst about how disastrous Mitt Romney was for Republicans, he received 60,277,548 popular votes -- the second most that a Republican presidential candidate has gotten ever. It's six million more than conservative saint, Ronald Reagan ever received. His percentage of votes, 47.5 percent (ah, the whimsy -- Mitt Romney getting 47 percent) is the third highest percentage for a Republican in the last six presidential elections.

And Republicans are wringing their hands at how bad a candidate Mitt Romney was for the party. Closing your eyes to reality is never a good thing.

Here's the deal:

The problem isn't that Mitt Romney was a bad candidate for Republicans, but rather that Mitt Romney was the best candidate Republicans had.

Republicans can complain all they want about the candidates they had, and wish someone else had run, but they did this to themselves.A year ago I wrote that when you spend four years calling the President of the United States a socialist Nazi Kenyan anti-American terrorist agent of the Devil killing old people and destroying the country, and you whip up your base to a frenzy that moves your party so far to the right that moderates become an endangered species, then you create a foundation where the only candidates you can possibly attract are Herman Cain, Donald Trump, Michele Bachmann, Jon Huntsman, Ron Paul, Newt Gingrich and Rick Santorum. And Mitt Romney ends up as your best chance.

In his play, Julius Caesar, Shakespeare wrote, "The fault, dear Brutus, is not in our stars. It's in ourselves." And so it is with today's Republican Party. The fault is not with Mitt Romney -- he did better than most Republican presidential candidates have done in 24 years. The fault, dear Brutus, is with the Republican Party itself. When looking for a culprit for the 2012 Presidential, Senate and House losses, Republicans need only look in the mirror.

http://www.huffingtonpost.com/robert-j-elisberg/in-defense-of-mitt-romney_b_2231083.html?utm_hp_ref=politics

SentientBeing
SentientBeing

@outsider2011   Understandable viewpoint. However, history and reality are somewhat different. If the leadership of the party (the Republican Party) seeks a fundamental policy of 'change', being particularly the empty 'inclusion' of the Democrats, then Hispanics will become the next African-Americans of the United States for the next three or four centuries, rather than keep following the pattern of historical immigrants (Italians, Poles, Greeks, Jews, Germans, Irish, etc.) and integrate into mainstream society. This seems likely. 

But, God willing, the social conservative base of the party will honor its principles and split. Preferably forming a Social Conservative or Christian Party, which may loose all the federal elections it wants for decades, but which would win significant monopolies in some two dozen states, and would likely have competitive elections in another 13 states or so, usually gouging whatever is left of the Republican Party. 

If the Republican Party leadership is wise, they will: bluff and work only non-substantive issues or fantasies; keep the platform intact; 'man up' and risk loosing one or two decades of federal elections. Meanwhile, they should strive to keep bringing accountability, responsibility, and the true progressive inclusion (self-efficacy, prosperity, autonomy, dignity, initiative, aspiration, etc.) at the state level, and county level. If they keep doing this, they will keep improving the lifestyle of those most Republican states, while the most Democratic states will keep becoming beacons which attract the broken and crippled of America. 

Winning federal elections is not worth the treason. The Republican Party ideology, with some exceptions, has done miracles for many Republican States. 

Most states where the Democratic Party ideology holds a near monopoly or at least an oligopoly are basically failed states. Without the federal system of government taxation and redistribution, they would be worse than Greece within one or two generations. 

Many, not all, the Republican dominant states could easily survive a hundred years or more without needing the current system of federal redistribution. 

https://docs.google.com/spreadsheet/ccc?key=0All0h4lh_xOsdFZMaVJ2X0poX1VnZERaUmNHVEFUT3c#gid=0

That's a link to an Excel spreadsheet. Close attention should be paid to columns F & H. Column F because at the end of the day, the only freedom workers/employers/entities we have are in private hands, following the laws of supply and demand in a free-market. Column H because it shows the harmful effect of column C which is composed of both freedom workers and the subsidized workers (any tax payer funded workers). Tax funded workers do pay taxes (that's why they are in Column C with the freedom workers). But columns F & H show the real nature of our current systems. In short, the higher the dollar amount in Column F, and the higher the proportion (%) in column H, the closer is that state to failure.

Good, or at least better states, are those with the lowest numbers on columns F & H.

Marky_D_Sodd
Marky_D_Sodd

@outsider2011  The reports of Mitt and Ann licking their wounds and crying around the house in California could be exaggerated...they've probably hired some of "those people" do lick their wounds for them.

MrObvious
MrObvious

@outsider2011 

It's exactly like the self-deportation notion. Basically - they're in their hearts conservatives. So ignore the xenophobic policies from GOP.

DonQuixotic
DonQuixotic

@outsider2011 

Mitt Romney would have eaten his left arm in front of a camera if he thought it would appeal to the GOP and gotten him elected.  Kind of ironic that as a retrospective on what they did wrong, the answer they come up with is their tactics.  Gee, maybe if the guy had solid opinions they wouldn't have had those problems?

gysgt213
gysgt213

@paulejb Are you posting just to get laughs?  Because its working.

DonQuixotic
DonQuixotic

@paulejb 

I predict Obama's policies this winter will bring about Snowmageddon 2: Snowpocalypse.

So if we're going to become Greece (for some reason), does that mean we'll have better food?

paulejb
paulejb

@outsider2011 ,

Why is a UN treaty required? US laws not good enough for you Obamniacs?

paulejb
paulejb

@outsider2011 ,

60 million Americans disagree, unfortunately 64 million Americans are consuming the Kool-Aid. Good luck with that, scooter.

outsider
outsider

@MrObvious @outsider2011 

And that is why they will continue to lose. 

It's ok to be radical extremists. Just don't tell anyone.. LOL, the party is a joke now. 

Marky_D_Sodd
Marky_D_Sodd

@gysgt213 @paulejb I read in the paper today of another high-school student who has committed suicide because he was being harassed and intimidated online.

And then, for some reason, it occurred to me to wonder whence Paule found/copied/developed his techniques. Odd, don't you think, that he hasn't picked up on the fact that it doesn't work with adults the way it does with teenagers.

 But, then, having bet and lost the farm on Romney -- in spite of repeated warnings that it just wasn't going to happen -- one is forced to the conclusion that critical thinking is not his strongest suit.

outsider
outsider

@paulejb @outsider2011 

Why are you so scared that doing anything that anyone else does somehow undermines your presumed emotionalism?

Why is it required? Because there is a chance that one day a repub will get back into office, and push all the wheel chairs off a peer so that they don't have to pay for the disabled.  

DonQuixotic
DonQuixotic

@paulejb @outsider2011 

64 million Americans are intelligent, whereas the other 60 million are knuckle-draggers.  No wait, I wouldn't want to make a generalization like that.  That's how you alienate voters by simplifying their beliefs, which in turn loses you elections.

MrObvious
MrObvious

@DonQuixotic @outsider2011 @MrObvious 

They have such a deep pond of wingers to pick from.

I mean the Democrats have Hillary and such - they could throw out half a dozen interchangeable crazies and let them slog it out on whom is the mostest rightwinger evar.

DonQuixotic
DonQuixotic

@Marky_D_Sodd @gysgt213 @paulejb 

There's actually been studies that show that people whom engage in online trolling are typically people who have been abused throughout their lives, and they use it as a means of lashing out at others anonymously to give themselves worth.  There's probably something to be said in your theory, but I'm pretty certain it wasn't Paul who was doing the bullying.

outsider
outsider

@MrObvious @paulejb @DonQuixotic @outsider2011 

Paulie isn't a moron. He's just still bitter that Obama won and he's saying stupid things because he has nothing else to do. 

Gadfly on the boards my ass. This is his life. 

He has to lash out - there is no other way for him to feel useful. 

MrObvious
MrObvious

@paulejb @MrObvious @DonQuixotic @outsider2011 

We were talking of world "standards, Ob. Slavery is alive and well in many areas of the world.

If we subscribed to the standards of the rest of the world we would have to bring back slavery, the treatment of women as second class citizens and communism.

YOU were. No one here makes the leap that if we have rights for disabled it is remotely the same as slavery or treating women as second class.

Only morons do.

paulejb
paulejb

@DonQuixotic @paulejb @outsider2011 ,

If we subscribed to the standards of the rest of the world we would have to bring back slavery, the treatment of women as second class citizens and communism.

outsider
outsider

@DonQuixotic @paulejb @outsider2011 

It does make it more difficult for the right to screw over their own citizens when the rest of the world is watching. 

Btw, the story also states that the treaty is supported by veterans groups, and disabled groups. Bipartisan approval - McCain even supported it. 

But veterans already served their purpose, right paulie? No need to protect them now. 

Leeches on the gov't, or something like that; isn't that the rights point of view?

outsider
outsider

@paulejb @outsider2011 

Nope, just hold you accountable if you don't honor your agreements. 

Sorta the reason for the UN. 

Read a history book. 

MrObvious
MrObvious

@paulejb @MrObvious @outsider2011 @DonQuixotic 

Your idea of a material advantage is something unearned and provided by the government as your right.

My idea of paying more in taxes so we can pay down the deficit is unearned?

Ooooooooh - you were making a statement about whatever demented fantasy you have of me and what I think.

Sorry - I only live in our reality, not your fantasy of me.

outsider
outsider

@paulejb @outsider2011 @DonQuixotic 

Which heritage are you referencing? 

Be specific. Freedom is the heritage? Believing something you don't means that people are brainwashed and giving up their freedom - is that what i'm understanding from you?

Or did you just mean certain people are taking away the heritage of other people? 

MrObvious
MrObvious

@paulejb @outsider2011 @DonQuixotic 

The material advantage of paying more in taxes to pay down the party that started with Reagan?

You and I have completely different advantages of what 'material advantage' means.